S&P cuts Munich Africa

Standard & Poor's said it lowered the long-term counterparty credit and insurer financial strength ratings on Munich Reinsurance Co. of Africa Ltd. (Munich Africa) and Munich Mauritius Reinsurance Co. Ltd. (Munich Mauritius) to A from A+.

The outlook is stable.

The agency said it lowered on Jan. 25 the local-currency ratings on the Republic of South Africa to A/A-1.

Under S&P's ratings criteria, sovereign risk is a key factor influencing the financial strength of insurers.

As a result, the vast majority of insurers are rated no higher than the relevant sovereign local-currency rating, the agency said.

The downgrade reflects the exposure of Munich Africa's business and investment portfolio to South Africa and the influence of general country risk factors on the company's business franchise and financial profile, S&P said.

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