Fitch Ratings has affirmed Luxembourg-based CAMCA Assurance's (CAA) and CAMCA Reassurance's (CAR) long-term issuer default ratings at 'A+', and the insurer financial strength ratings at 'A+'.
Both companies are ultimately owned by Credit Agricole's 39 regional banks.
The ratings reflect Fitch’s view that CAA and CAR are core captive companies of Credit Agricole, and that its regional banks will provide support to the core captive insurance subsidiaries if needed.
The support is evident in capital injections by the regional banks of Credit Agricole into CAA in the past, according to Fitch.
It was also noted that CAMCA's insurer financial strength ratings are aligned with Credit Agricole's issuer default ratings.
Both companies rely on the parent for its role in insuring the group's guaranteed housing loans, business position and strategic direction while profit reallocation mechanisms and reinsurance programmes further strengthen CAMCA’s integration with Credit Agricole.
Fitch assessed the credit profile of CAMCA as strong, further supporting its core captive status within Credit Agricole.
It was noted that this is driven by the captives’ stable earnings record and operating model, supportive capitalisation and strong earnings.
CAMCA has developed a partial internal model (PIM) under Solvency II, which was approved by the regulator in 2020 and the company used it for Solvency II capital purposes at the end of 2019.
Fitch suggested that the adoption of the PIM results in a stabilisation of the Solvency II coverage ratio because it considers the loss absorption effect of provisions for variable commissions and reinsurance.
In addition, CAA reported a solid 2019 net profit of €14.2 million, compared to €11.4 million in 2018. Meanwhile, CAR's net profit before allocation to the equalisation reserve was €15.5 million at end-2019, compared to 2018’s € 24.5 million.