Group says insurer is ‘no different from anyone else’
Groupama has won the support of one of its biggest partners, Brokerbility, but it will continue to come under scrutiny amid concerns its credit rating may be downgraded.
Groupama’s status was raised at a placement meeting held last week by the broker support group, which controls about £450m in premium. The session was chaired by its managing director Ian Stutz and 34 brokers were represented.
At present, Standard & Poor’s has Groupama and its subsidiaries on a BBB- rating, which is step above ‘junk’ status. The insurer put its UK arm and broking subsidiaries up for sale last month after being hit hard by the eurozone debt crisis.
Stutz told Insurance Times that Groupama, one of its panel insurers, was the subject of discussion at the meeting because of its difficult credit position.
He said: “Quite simply, as a group I am sure we are no different to any other brokers - we have to put on watch those brokers that have a difficult credit rating position and I think it is fair to say that there are a lot of strong words coming out of Groupama saying that, as far as the UK business is concerned, it is ‘business as usual’ for them,” he said.
“But, as far as our brokers are concerned, it is close to a rating that would put us in a position where we may have to advise clients mid-term as to whether their business would need to be moved away.
“We are not in that position at the moment. Groupama is no different from anyone else. If the position did deteriorate, we would have to think about where that business continued to be placed in the future, but as it stands at the moment it is still a panel insurer of Brokerbility.”
Bids for Groupama are expected at the end of this month, with private equity expected to take the strongest interest. Brit is also up for sale, but no bidder has yet emerged.
AXA and Aviva were in discussions with brokers about transferring business from Groupama, following its decision to sell up, as Insurance Times reported last month.