(Business Wire) – A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb+“ of CIGNA Life Insurance Company of Europe SA-N.V. (CLICE) (Belgium). The outlook for both ratings remains stable.

The ratings reflect the company’s strong capitalisation, increasing brand recognition within Europe and good underwriting performance moderated by the prospect of negative growth rates for European and UK economies.
A.M. Best expects CLICE’s risk-adjusted capitalisation to remain strong in 2009. Pressures arising from the company’s expected premium growth are likely to be negated through the use of intra-group reinsurance. The company is projected to return to a dividend paying policy, with relatively strong return on capital of more than 10% forecasted for 2009 in spite of the difficult economic conditions. Capital market turmoil in 2008 is not expected to have affected CLICE to a significant extent given its lack of equity investments.

A.M. Best expects the company’s gross premiums written to grow between 5% to 7% during 2009 due to continuing expansion across Europe and the Middle East, especially on the expatriate segment. This is because CLICE is able to increase market share in its business-to-business ventures where it has higher brand recognition.

A.M. Best expects CLICE’s combined ratio to deteriorate to the range of 96%-98% in 2008 to 2009 as a result of new business volume growth and increasing expense ratios in both UK and Spanish health businesses, partly offset by favourable loss ratios below priced levels. Notwithstanding this, 2008 earnings—when reported—are likely to show increased capital gains from bond investments driven by the fall in interest rates.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.

A.M. Best Co.
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