Moody’s ups If P&C Insurance, rates notes Baa2 (hyb)

Moody's Investors Service said it upgraded the insurance financial strength ratings of If P&C Insurance Ltd. (Publ) and If P&C Insurance Co. Ltd. (If P&C) to A1 from A2.

In the same action, the agency upgraded the senior debt rating of Sampo plc, which is the parent company of If P&C, to Baa1 from Baa2.

Moody's also assigned a Baa2 (hyb) rating to the dated subordinated notes issued in November by If Property & Casualty Insurance Holding Ltd, which is the holding company of If P&C's main operating entities.

The outlooks are stable.

The upgrade of the ratings reflects If P&C's: (a) Steady top tier P&C market positions in Sweden, Norway and Finland; (b) track record in reporting consistently strong profitability, both from a return on capital and underwriting perspective, which Moody's believes will be sustained; (c) relatively low financial leverage; and (d) robust capitalization, the agency said.

Moody’s explained that the Baa2 (hyb) ratings assigned to the SEK 500 million and SEK 1.5 billion dated subordinated notes (the issuance was divided into two tranches) due 2046 are consistent with Moody's standard notching practices for debts issued by insurance holding companies, and reflect: (a) the subordination of the bonds; (b) the optional and mandatory (based on breach of regulatory capital requirements) coupon skip mechanisms; and (c) the cumulative nature of deferred coupons, in case of deferral.

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