Compagnie Européenne de Garanties et Cautions: Rating Report

CEGC’s ratings were derived using the building block approach following DBRS Morningstar’s Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations (September 2019). CEGC’s ratings take into consideration the Company’s strong market position in the Republic of France (rated AAA with a Stable trend by DBRS Morningstar) as the second-largest player in the home loan guarantees line of business, the extensive distribution reach it has through the Groupe BPCE banking networks and the additional diversification of earnings through its surety and financial guarantees businesses. The Company exercises prudent and conservative underwriting, which has resulted in a high-quality insurance portfolio, as evidenced by a history of consistent underwriting profitability. The Company’s focus on expense management and underwriting, complemented by a strong housing market in France in the past few years, has allowed it to generate excellent earnings. CEGC has good and improving capitalization, meeting its regulatory capital requirements through a mixture of reinsurance, debt and common equity.