Ageas
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BenjaminBuffett
- Sr. Member
- Berichten: 286
- Lid geworden op: 13 jul 2016
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Re: Ageas
20 Jul 2018
Moody's places Ageas on review for upgrade; AG Insurance's A2 IFSR affirmed with stable outlook
London, 20 July 2018 -- Moody's Investors Service has today placed on review for upgrade the Baa2 issuer rating of Ageas SA/NV (Ageas). The outlook changed to rating under review from positive. Moody's has also affirmed at A2 the Insurance Financial Strength Rating (IFSR) on AG Insurance, Ageas' main operating subsidiary, with a stable outlook.
The rating action follows the decision from the Court of Appeal in Amsterdam to declare binding the Fortis settlement agreement entered into between Ageas and a few claimant organisations for legacy issues related to the break-up of the Fortis Group, whose assets and liabilities Ageas has partly inherited.
Please refer to the end of this press release for a detailed list of affected ratings.
RATINGS RATIONALE
RATINGS PLACED ON REVIEW FOR UPGRADE
--Ageas SA/NV
The review for upgrade on Ageas SA/NV reflects Moody's view that the decision taken on Friday, 13 July 2018 by the Court of Appeal in Amsterdam to declare binding the Fortis settlement agreement is a positive milestone in reducing the uncertainty arising from legal risks and the corresponding financial impact from legacy issues.
Ageas' current issuer rating is three notches below the A2 IFSR of AG Insurance, its main operating subsidiary. This is one notch wider than Moody's standard notching practice for holding companies of insurers headquartered and operating in jurisdictions subject to group wide regulation and reflects the uncertainty of the legal risks and the corresponding financial impact arising from the legacy issues.
In 2016, Ageas and a few claimant organisations reached an out-of-court agreement to settle litigation, whereby the issuer would indemnify eligible shareholders with respect to allegations inherited from Fortis group and related to Fortis' alleged miscommunication to the market in 2007 and 2008. The final agreement foresees a settlement amount of EUR1.3 billion to be paid to eligible claimants according to a timeline established by the Court. Ageas has already fully provisioned this amount in its 2016 and 2017 financial accounts and has also ring-fenced the required cash resources to settle these claims.
However, according to the terms of the agreement Ageas reserves the right to terminate the Fortis settlement in the event opt-out notices represent an amount in excess of their expectations, which Ageas have set at 5% of the settlement amount. The opt-out period as determined by the Court will end on 31 December 2018.
Moody's review will focus on the final outcome of the Fortis settlement agreement as well as the potential impact of remaining minor legacy issues. Given the timeline for the opt-out notices, Moody's anticipates that the conclusion of the review may extend beyond Moody's standard three months.
Ageas' credit profile remains supported by good capital and liquidity positions, with a reported Solvency II coverage ratio of 191% (under the approved partial internal model) and cash holdings of EUR1.7 billion as at Q1 2018. Ageas' operating performance in 2017 was also positive, with a 2017 net income of EUR623 million, a group combined ratio of 95.2% and good progress towards meeting the key targets indicated in the 2015-2018 business plan. The group benefits from a focus on retail customers as well as from material diversification with business written in Life (69%) and Non-Life (31%) via meaningful operations in Belgium, Portugal, UK and France in addition to joint ventures in Luxembourg, Turkey and Asia.
In July 2018 Ageas also received regulatory approval to operate reinsurance activities, which the issuer intends to use primarily to manage the intra-Group reinsurance programme. The issuer expects this to enhance the fungibility of capital within the Group and estimates that its Solvency II coverage ratio would increase by approximately 5 percentage points as a result of greater diversification benefits.
At the same time the Group announced there would be no changes in the business relationship with BNP Paribas Fortis SA/NV (BNPPF), a bank with which the Group holds an exclusive distribution agreement. In particular, BNPPF held an option to sell by the end of June 2018 to Ageas a minority stake in AG Insurance. BNPPF's decision to not exercise the option resulted in the continuation of the existing ownership structure at AG Insurance and more in general of the relationship between AG Insurance, Ageas and BNPPF, which Moody's believes to be a credit positive for Ageas. (please refer to Moody's issuer comment published on 9 July: (https://www.moodys.com/researchdocument ... BC_1133270)
WHAT COULD CHANGE THE RATINGS UP/DOWN
Ageas' ratings could be upgraded in case (i) the final outcome of the Fortis settlement is substantially in line with the terms of the agreement declared binding by the Court with no significant opt-outs and (ii) the Group does not report a material deterioration in its current level of capital position, liquidity, profitability and financial flexibility.
Conversely, Ageas' ratings would be confirmed at their current levels if, following the review, the final outcome of the Fortis settlement differed materially from the terms declared binding by the Court due to significant opt-outs, or if Ageas exercised the option to terminate the agreement.
RATINGS AFFIRMED
-- AG Insurance: A2 IFRS affirmed with stable outlook
Moody's has affirmed the A2 IFSR on AG Insurance with a stable outlook reflecting Moody's expectation that the leading market position in Belgium, strong capitalisation and consistent profitability in line with the overall rating level will characterise the issuer's credit profile over the next 12 to 18 months.
In 2017 AG Insurance reported a good set of results with IFRS net income at EUR618.5 million (2016: EUR544.8 million), equivalent to a Moody's-calculated Return on Capital of 5.6%. AG Insurance has shown a consistent profitability over the years as a result of disciplined operating performances in both Life and Non-Life. The latter reported a strong 2017 combined ratio of 91% (2016: 96%), partly benefitting from benign weather during the year.
Free capital generation was also sustained and allowed AG Insurance to upstream to its shareholders EUR520.8 million of dividends in 2017. Furthermore, AG Insurance's capitalisation remained robust in 2017 with a fully-loaded Solvency II coverage ratio at 229%.
WHAT COULD MOVE THE RATINGS DOWN/UP
Positive rating pressure for AG Insurance could arise from a combination of: (i) An improvement in profitability with a 5 Year Return on Capital consistently above 7%; (ii) An improvement in asset quality with a lower amount of holdings invested in relatively volatile assets such as Equities and Real Estate and resulting in a high risk asset ratio (i.e. as a proportion of Shareholders Equity) below 80%.
Negative rating pressure could arise from: (i) A material deterioration in capital adequacy and/or (ii) A material deterioration in net income with Return on Capital decreasing to below 4% and/or (iii) Adjusted financial leverage at Ageas Group consistently above 40% with earnings coverage below 4x.
SUMMARY PROFILES OF AFFECTED GROUPS
Ageas SA/NV, headquartered in Brussels, Belgium, had consolidated total assets of EUR103.3 billion and total equity of EUR10,162 million at year-end 2017 under IFRS.
AG Insurance, headquartered in Brussels, Belgium, had consolidated total assets of EUR75.6 billion and total equity of EUR7,060 million at year-end 2017 under IFRS.
Moody's places Ageas on review for upgrade; AG Insurance's A2 IFSR affirmed with stable outlook
London, 20 July 2018 -- Moody's Investors Service has today placed on review for upgrade the Baa2 issuer rating of Ageas SA/NV (Ageas). The outlook changed to rating under review from positive. Moody's has also affirmed at A2 the Insurance Financial Strength Rating (IFSR) on AG Insurance, Ageas' main operating subsidiary, with a stable outlook.
The rating action follows the decision from the Court of Appeal in Amsterdam to declare binding the Fortis settlement agreement entered into between Ageas and a few claimant organisations for legacy issues related to the break-up of the Fortis Group, whose assets and liabilities Ageas has partly inherited.
Please refer to the end of this press release for a detailed list of affected ratings.
RATINGS RATIONALE
RATINGS PLACED ON REVIEW FOR UPGRADE
--Ageas SA/NV
The review for upgrade on Ageas SA/NV reflects Moody's view that the decision taken on Friday, 13 July 2018 by the Court of Appeal in Amsterdam to declare binding the Fortis settlement agreement is a positive milestone in reducing the uncertainty arising from legal risks and the corresponding financial impact from legacy issues.
Ageas' current issuer rating is three notches below the A2 IFSR of AG Insurance, its main operating subsidiary. This is one notch wider than Moody's standard notching practice for holding companies of insurers headquartered and operating in jurisdictions subject to group wide regulation and reflects the uncertainty of the legal risks and the corresponding financial impact arising from the legacy issues.
In 2016, Ageas and a few claimant organisations reached an out-of-court agreement to settle litigation, whereby the issuer would indemnify eligible shareholders with respect to allegations inherited from Fortis group and related to Fortis' alleged miscommunication to the market in 2007 and 2008. The final agreement foresees a settlement amount of EUR1.3 billion to be paid to eligible claimants according to a timeline established by the Court. Ageas has already fully provisioned this amount in its 2016 and 2017 financial accounts and has also ring-fenced the required cash resources to settle these claims.
However, according to the terms of the agreement Ageas reserves the right to terminate the Fortis settlement in the event opt-out notices represent an amount in excess of their expectations, which Ageas have set at 5% of the settlement amount. The opt-out period as determined by the Court will end on 31 December 2018.
Moody's review will focus on the final outcome of the Fortis settlement agreement as well as the potential impact of remaining minor legacy issues. Given the timeline for the opt-out notices, Moody's anticipates that the conclusion of the review may extend beyond Moody's standard three months.
Ageas' credit profile remains supported by good capital and liquidity positions, with a reported Solvency II coverage ratio of 191% (under the approved partial internal model) and cash holdings of EUR1.7 billion as at Q1 2018. Ageas' operating performance in 2017 was also positive, with a 2017 net income of EUR623 million, a group combined ratio of 95.2% and good progress towards meeting the key targets indicated in the 2015-2018 business plan. The group benefits from a focus on retail customers as well as from material diversification with business written in Life (69%) and Non-Life (31%) via meaningful operations in Belgium, Portugal, UK and France in addition to joint ventures in Luxembourg, Turkey and Asia.
In July 2018 Ageas also received regulatory approval to operate reinsurance activities, which the issuer intends to use primarily to manage the intra-Group reinsurance programme. The issuer expects this to enhance the fungibility of capital within the Group and estimates that its Solvency II coverage ratio would increase by approximately 5 percentage points as a result of greater diversification benefits.
At the same time the Group announced there would be no changes in the business relationship with BNP Paribas Fortis SA/NV (BNPPF), a bank with which the Group holds an exclusive distribution agreement. In particular, BNPPF held an option to sell by the end of June 2018 to Ageas a minority stake in AG Insurance. BNPPF's decision to not exercise the option resulted in the continuation of the existing ownership structure at AG Insurance and more in general of the relationship between AG Insurance, Ageas and BNPPF, which Moody's believes to be a credit positive for Ageas. (please refer to Moody's issuer comment published on 9 July: (https://www.moodys.com/researchdocument ... BC_1133270)
WHAT COULD CHANGE THE RATINGS UP/DOWN
Ageas' ratings could be upgraded in case (i) the final outcome of the Fortis settlement is substantially in line with the terms of the agreement declared binding by the Court with no significant opt-outs and (ii) the Group does not report a material deterioration in its current level of capital position, liquidity, profitability and financial flexibility.
Conversely, Ageas' ratings would be confirmed at their current levels if, following the review, the final outcome of the Fortis settlement differed materially from the terms declared binding by the Court due to significant opt-outs, or if Ageas exercised the option to terminate the agreement.
RATINGS AFFIRMED
-- AG Insurance: A2 IFRS affirmed with stable outlook
Moody's has affirmed the A2 IFSR on AG Insurance with a stable outlook reflecting Moody's expectation that the leading market position in Belgium, strong capitalisation and consistent profitability in line with the overall rating level will characterise the issuer's credit profile over the next 12 to 18 months.
In 2017 AG Insurance reported a good set of results with IFRS net income at EUR618.5 million (2016: EUR544.8 million), equivalent to a Moody's-calculated Return on Capital of 5.6%. AG Insurance has shown a consistent profitability over the years as a result of disciplined operating performances in both Life and Non-Life. The latter reported a strong 2017 combined ratio of 91% (2016: 96%), partly benefitting from benign weather during the year.
Free capital generation was also sustained and allowed AG Insurance to upstream to its shareholders EUR520.8 million of dividends in 2017. Furthermore, AG Insurance's capitalisation remained robust in 2017 with a fully-loaded Solvency II coverage ratio at 229%.
WHAT COULD MOVE THE RATINGS DOWN/UP
Positive rating pressure for AG Insurance could arise from a combination of: (i) An improvement in profitability with a 5 Year Return on Capital consistently above 7%; (ii) An improvement in asset quality with a lower amount of holdings invested in relatively volatile assets such as Equities and Real Estate and resulting in a high risk asset ratio (i.e. as a proportion of Shareholders Equity) below 80%.
Negative rating pressure could arise from: (i) A material deterioration in capital adequacy and/or (ii) A material deterioration in net income with Return on Capital decreasing to below 4% and/or (iii) Adjusted financial leverage at Ageas Group consistently above 40% with earnings coverage below 4x.
SUMMARY PROFILES OF AFFECTED GROUPS
Ageas SA/NV, headquartered in Brussels, Belgium, had consolidated total assets of EUR103.3 billion and total equity of EUR10,162 million at year-end 2017 under IFRS.
AG Insurance, headquartered in Brussels, Belgium, had consolidated total assets of EUR75.6 billion and total equity of EUR7,060 million at year-end 2017 under IFRS.
Re: Ageas
morgen de aandelen va n ageas veel omhoog ?
Re: Ageas
Vind ik NIET leuk!
Re: Ageas
Waarom niet ?
schrik dat er binnenkort van die meeneemchinezen aan het loket zitten.
Dan kan je bij Ageas ook chinees kopen
schrik dat er binnenkort van die meeneemchinezen aan het loket zitten.
Dan kan je bij Ageas ook chinees kopen
Re: Ageas
Ageas is een serieuse dividend koe voor mij, waar ik hoop nog lang van te kunnen melken!
Dit met een stijgende koers op lange termijn is een goddelijk duo.
Dit met een stijgende koers op lange termijn is een goddelijk duo.
Re: Ageas
Fosun heeft reeds 3% van Ageas, Ping An 5%. Als ze samen het belang dat BNPP nog heeft (25%) overkopen dan komen ze boven de drempel van 30%. Zou Ageas zelf nog altijd een voorkooprecht hebben? Ik denk het niet.
Re: Ageas
@molenveld: idd rapper gereageerd dan nagedacht
Re: Ageas
Mooi dat de koers beetje maar naar faire waarde zal gaan door overnamekoorts. Maar ik verkoop toch niet. Van plan om hier nog lang dividend uit te puren.
Re: Ageas
Had eigenlijk al een stijging verwacht na positief vonnis v/d rechter in het Fortisdossier, morgen dan maar?