Sorema Reinsurance Group Assgnd 'AA-' CPA Rtg by S&P

Business Wire, Sept 1, 1997

LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/1/97-- Standard & Poor's today assigned double-'A'-minus claims-paying ability (CPA) rating to SOREMA (UK) Ltd. (SOREMA UK) and to Sorema North America Reinsurance Co. (SOREMA NA) and has at the same time upgraded to double-'A'-minus from single-'A' its existing CPA rating on Societe de Reassurances des Assurances Mutuelles Agricoles (SOREMA France). These ratings are wholly-based upon explicit support received from the ultimate parent, Caisse Centrale des Assurances Mutuelles Agricoles (CCAMA, CPA rating double-'A'-minus), the principal operating entity of Groupama, which is the sixth-largest insurer in France and a market leader in the French agricultural and health insurance sectors.

MAJOR RATING FACTORS: -- Explicit parental support: CCAMA has formally guaranteed each of

SOREMA France, SOREMA NA and SOREMA UK, in respect of all

policyholder obligations underwritten while the guarantees remain

in force. -- Business Review: With net written premiums of about French Franc

(FFr) 3.1 billion (US$750 million approx.) at year-end 1996, the

Sorema group is a midsize reinsurance player competing in a market

that places an increasing emphasis on capacity as well as on

financial security. To maintain its market position, Sorema expects

to benefit from cedants' frequent preference to diversify their

dependance on a small number of major reinsurers. Despite Sorema's

increasingly profit-oriented underwriting philosophy, as evidenced

by substantially improved results over the past three years, the

likelihood of further softening in premium rates could affect the

group's profitability in the future in line with the rest of the

market. -- Liquidity: Sorema's liquidity is seen as strong, with marketable

securities at market values representing 93% of technical reserves on

a consolidated basis at year-end 1995. -- Capitalization: Capital strength across the Sorema group is considered

to be excellent. The reinsurance group's consolidated solvency ratio

amounted to 79% at year-end 1995 and is likely to remain at

approximately this level prospectively. Also, on a risk-based capital

analysis, group capitalization appears excellent, both currently and

in the future.

EXPECTATIONS:

Standard & Poor's expects the Sorema group to expand its business position mainly in emerging markets of the South-East Asia, South America and Eastern Europe and to stabilize earnings at a lower level through an ongoing focus on quality underwriting. Underlying capital strength is projected to remain strong, Standard & Poor's said. ---CreditWire

CONTACT: Marc-Philippe Juilliard, (44) 171-826-3662

Karin Clemens, (44) 171-826-3653

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