S&P Affirms Ceska’s ‘BBB’ Rating

Standard & Poor’s Ratings Services announced that it has affirmed its “BBB” long-term counterparty credit and insurer financial strength ratings on Czech insurer Ceska pojistovna a.s. (Ceska) with a stable outlook.

“The ratings reflect the company’s strong competitive position and strong operating performance,” stated S&P credit analyst Paul Bradley. “These positive factors are offset by the lack of available market instruments to allow full asset-liability management.”

S&P noted: “Ceska is the largest composite insurance company in the Czech Republic (foreign currency A-/Positive/A-2, local currency A/Positive/A-1). Ceska’s 100 percent shareholder, PPF Group N.V. (PPF), is neither rated nor under surveillance by Standard & Poor’s.

“The stable outlook reflects Standard & Poor’s expectation that quality of capital will improve and that Ceska will maintain an appropriate dividend policy. The company is expected to maintain a dominant position in the Czech market for the foreseeable future.

“Going forward, Ceska is expected to maintain a strong post-tax ROE of about 15 percent-20 percent. A greater level of transparency at the PPF level, as may be achieved by the current restructuring program, could have either upside or downside potential for the ratings.”