Standard & Poor (S&P)'s has assigned its BB+ long-term counterparty credit and insurer financial strength ratings to Tunisia-based insurer Compagnie d'Assurances et de Réassurances Tuniso-Européenne (CARTE), reflecting the company's aggressive--albeit improving--investment profile and limited financial flexibility, as well as its solid operating performance and good business position. The outlook is stable.
"We view positively CARTE's current efforts to reduce its substantial exposure to Tunisian equities to 65.3 percent of invested assets in 2002, from 83 percent in 1998," said S&P's credit analyst Emmanuelle Calès.
"The company's investment leverage has, however, remained stable since 2001, at 1.7x shareholders' equity. This is not expected to improve materially at the current level of capital," added Calès.
CARTE is jointly owned by Groupe Doghri and French insurer Les Mutuelles du Mans Assurances IARD, which hold 45 percent and 43 percent of the capital of the company, respectively. Groupe Doghri is actively involved in CARTE's management, mainly through its CEO, Hassine Doghri, while MMA's holding in CARTE is merely a financial investment following MMA's 2000 decision to refocus on European markets.
"Going forward, Standard & Poor's expects that CARTE will rebalance its invested assets in favor of fixed income securities. Financial flexibility is likely to remain limited given the current shareholding structure, but operating performance is expected to gradually improve," added Calès.
"Equity write-downs are not expected to weigh on future earnings. Capitalization should remain stable thanks to CARTE's thorough monitoring of exposures and a gradual increase of shareholders' equity through higher retained earnings." — (menareport.com)
© 2003 Mena Report (www.menareport.com)
