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TEXT-S&P lwrs CBL Insurance Ltd. rtgs to 'BB-';otlk negative
June 5, 2012 / 6:42 AM / 5 years ago

TEXT-S&P lwrs CBL Insurance Ltd. rtgs to 'BB-';otlk negative

(The following statement was released by the rating agency)

June 05 -

Overview

-- We have lowered our ‘BB+’ financial strength and issuer credit ratings on New Zealand-based CBL Insurance Ltd. (CBL) to ‘BB-'. The outlook is negative.

-- CBL’s total adjusted capital has been materially eroded by goodwill from its acquisition of European Insurance Services Ltd. (EISL; not rated), and increased deferred acquisition costs.

-- Although the company reported strong underlying business growth in 2011, the doubling of its total gross exposure has not been supported by adequate capital growth.

-- The outlook is negative, reflecting our expectations that it will take some time for CBL to build up sufficient capital through retained earnings. We believe that there is a reasonable probability that the company will not be able to achieve its forecast earnings because of its increased exposure to a weakening European economy.

Rating Action

On June 5, 2012, Standard & Poor’s Ratings Services lowered its financial strength and issuer credit ratings to ‘BB-’ from ‘BB+', on New Zealand-based CBL Insurance Ltd. (CBL). The outlook is negative.

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