Standard & Poor’s Ratings Services has lowered to ‘A+’ from ‘AA-‘ its long-term counterparty credit and insurer financial strength ratings on the core operating entities of the French credit insurance group Euler Hermes. At the same time, the short-term counterparty credit rating on Hermes Kreditversicherungs-AG was lowered to ‘A-1’ from ‘A-1+’. The outlook is stable.

The ratings actions follow the downgrade of Euler Hermes’ ultimate parent company, the German group Allianz AG to ‘AA-‘ from ‘AA’. (See “Allianz AG and Core Subsidiaries Ratings Lowered to ‘AA-‘; Outlook Negative”, published on RatingsDirect, Standard & Poor’s web-based credit analysis system, at

In addition, the financial strength rating on Euler International was withdrawn at the company’s request. Euler International is now in run-off and its previous book of business has been re-underwritten by local Euler Hermes companies.

The ratings on the Euler Hermes group are based on its very strong business position, solid operating performance, and strong albeit decreasing capitalisation and financial flexibility. “Standard & Poor’s expects that the level of insolvencies will remain high, or even deteriorate, in 2003, but that management will continue to implement strict underwriting rules, monitor risk, and achieve a combined ratio below 90%,” says Standard & Poor’s credit analyst Laura Santori. “The group’s combined capitalisation is expected to recover only slowly over the medium term, through the rebuilding of equalisation reserves and retained earnings, and should be maintained in the ‘A’ range.”

Complete ratings information is available to subscribers of RatingsDirect at All ratings affected by this rating action can be found on Standard & Poor’s public website at; under Fixed Income in the left navigation bar, select Credit Ratings Actions. Alternatively, call one of Standard & Poor’s Ratings Desks:

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