Fitch Ratings has affirmed the insurance financial strength rating of KBC Group Re, the group's wholly owned core captive reinsurance subsidiary based in Luxembourg, at “A-”.
The affirmation of KBC Group Re reflects its core strategic status in relation to its parent company as well as its solid standalone financial profile and cautious management.
An upgrade of KBC Group's rating could trigger an upgrade for KBC Group Re. Conversely, a downgrade of KBC Group's rating or a major deterioration within its collateralised debt obligation book could trigger a downgrade for KBC Group Re.
Fitch has been hesitant in its appraisal, citing uncertainty over sovereign support and stability.
The lack of a rating upgrade for KBC Group Re’s parent company, KBC Bank, partly reflects the view that there is a clear intention of the EU to ultimately reduce state support for financial institutions, as demonstrated by a series of policy initiatives.
KBC Bank’s performance has varied dramatically since 2009, although growth has been steady since the final quarter of 2012.
