Moody’s cuts South African insurers

Moody's Investors Service said it downgraded the global scale insurance financial strength and related debt ratings of South African insurance groups and related entities, and assigned a negative outlook.

In the same action, the agency affirmed the insurers' national scale ratings.

The actions conclude the review for downgrade that began on April 4.

The South African insurers included in this rating action are:

• Old Mutual Life Assurance Co. (South Africa) Ltd.: Insurance financial strength rating downgraded to Baa2 from Baa1, with negative outlook;

• MMI Group Ltd.: Insurance financial strength rating downgraded to Baa2 from Baa1, with negative outlook; national scale IFS rating affirmed at Aaa.za;

• Guardrisk group of entities (Guardrisk Insurance Co. Ltd. and related entities): Insurance financial strength ratings downgraded to Baa3 from Baa2, with negative outlook. National scale IFS ratings affirmed at Aaa.za; and

• Standard Insurance Ltd.: Insurance financial strength rating downgraded to Baa3 from Baa2, with negative outlook. National scale insurance financial strength rating affirmed at Aa1.za.

Moody’s said the actions follow the downgrade of the long-term issuer and senior unsecured ratings of the government of South Africa to Baa3 from Baa2, with negative outlook. The sovereign downgrade reflects the agency’s view that recent political developments suggest a weakening of the country's institutional strength which casts doubt over the strength and sustainability of the recovery in growth and the stabilization of the debt-to-GDP ratio over the near-term.

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