March 30 - Overview
-- On March 28, 2012, we revised the outlook on South Africa to negative
from stable and affirmed the local, foreign and national scale ratings at
'A/A-1', 'BBB+/A-2', and 'zaAAA/zaA-1', respectively.
-- Under our criteria, insurers with a material direct exposure to a
sovereign are rated no higher than the local currency rating on that sovereign.
-- Therefore, we are revising the outlooks on Munich Reinsurance Co. of
Africa Ltd. and Munich Mauritius Reinsurance Co. Ltd. to negative from stable
and affirming the 'A' long-term ratings on these companies.
Rating Action
On March 30, 2012, Standard Poor's Ratings Services revised to negative from
stable the outlooks on South Africa-based Munich Reinsurance Co. of Africa
Ltd. (Munich Africa) and Mauritius-based Munich Mauritius Reinsurance Co. Ltd.
(Munich Mauritius). At the same time, we affirmed the 'A' long-term
counterparty credit and insurer financial strength ratings on these companies.
Rationale
On March 28, 2012, we revised to negative from stable the outlook on the
Republic of South Africa and affirmed the ratings on the sovereign. Under our
ratings criteria, sovereign risk is a key factor influencing the financial
strength of insurers. As a result, insurers with a material direct exposure to
a sovereign are rated no higher than the local currency rating on that
sovereign.
Our approach reflects the exposure of Munich Africa's business and investment
portfolios and deposits to South Africa and the influence of general country
risk factors on the company's business franchise and financial profile.
The ratings on composite reinsurer Munich Mauritius reflect its group status
as "core" to Munich Africa. It receives extensive reinsurance support from
both the ultimate parent Munich Reinsurance Co. (AA-/Stable/--) and
Munich
Africa.
Outlook
The negative outlook on Munich Africa and Munich Mauritius reflects that on
South Africa. If we were to lower the sovereign credit rating on South Africa,
we would also lower the ratings on Munich Africa and Munich Mauritius so that
they remain aligned with those on the sovereign.
Positive rating action is remote without an improvement in the sovereign
rating.
Related Criteria And Research
All articles listed below are available on RatingsDirect on the Global Credit
Portal, unless otherwise stated.
-- Principles Of Credit Ratings, Feb. 16, 2011
-- Use Of CreditWatch And Outlooks, Sept. 14, 2009
-- Group Methodology, April 22, 2009
-- Interactive Ratings Methodology, April 22, 2009
-- Counterparty Credit Ratings And The Credit Framework, April 14, 2004
-- Criteria Update: Factoring Country Risk Into Insurer Financial
Strength Ratings, Feb. 11, 2003
-- Sovereign Government Rating Methodology And Assumptions, June 30, 2011
Ratings List
Ratings Affirmed; CreditWatch/Outlook Action
To From
Munich Reinsurance Co. of Africa Ltd.
Munich Mauritius Reinsurance Co. Ltd.
Counterparty Credit Rating A/Negative/-- A/Stable/--
Financial Strength Rating A/Negative/-- A/Stable/--
Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.
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