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Home . International Insurance News . Europe . S&P: HDI Italia Put On Watch Negative

S&P: HDI Italia Put On Watch Negative

Friday, December 05, 2008

Milan, Italy – December 5, 2008 – Standard & Poor's Ratings Services said today that it placed its 'A' long-term counterparty credit and insurer financial strength ratings on Italy-based insurer HDI Assicurazioni SpA (HDI/Italia or HDI/I) on CreditWatch with negative implications.
"The CreditWatch placement reflects our view that the company is of reduced strategic importance to the Talanx primary insurance group, said Standard & Poor's credit analyst Paola Del Curatolo.
This follows TPG's postponement of the planned merger between HDI/I and the industrial line business from the Italian branch of the group's core operating entity, HDI-Gerling Industrie Versicherung AG (A+/Stable/--). We viewed the planned merger, which was to be completed in 2008, as supportive of HDI/I's importance to TPG.
TPG's core operating entities are rated A+/Stable/--, and it is intermediately held by Talanx AG (A-/Stable/--). Our concerns about HDI/I's strategic importance to TPG's business model also arose because of the Italian insurer's weakening stand-alone characteristics due to a restricted competitive position in the Italian market, lack of prospects for profitable growth, and poor operating performance.
We expect to resolve the CreditWatch status by the end of this month, after we further scrutinize the company's stand-alone business and financial profile and prospective role within TPG. We do not expect to lower the ratings by more than four notches.

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