TEXT-Fitch maintains French non-life insurance sector's outlook at stable

(The following statement was released by the rating agency)

Oct 02 - Fitch Ratings has maintained the French non-life insurance sector's outlook at stable, indicating that a majority of French non-life insurer ratings are likely to be affirmed over the next 12-24 months.

Pricing conditions and claims experience have continued showing signs of improvement, as French non-life insurers experienced recovery in their technical results in 2011-2012. No material climate events occurred during the year.

Nevertheless, volume growth continued to be weak in 2011-2012 and Fitch believes the French insurance industry is facing a number of challenges, which have been amplified by the financial crisis. The difficult economic environment has led to the emergence of low-cost offers that are more attractive to policyholders looking for less expensive and simpler insurance products.

Fitch considers the main risks to French non-life insurers' ratings in the next 12-24 months to be a return of aggressive pricing policies, which would have a negative effect on the sector's profitability, and a prolonged period of low financial returns. Should these trends materialise, this could exert negative pressure on French non-life insurers' ratings and prompt a revision of the rating outlook to negative.

As part of its forthcoming series of insurance roadshows, Fitch will be in Paris on 3 October 2012. Marc-Philippe Juilliard, Senior Director in Fitch's insurance team will speak on French life and non-life insurance, and there will be presentations on European Life Insurance, Reinsurance and Impact of Eurozone Crisis on Insurers hosted by senior members of Fitch's insurance team.

Link to Fitch Ratings' Report: 2013 Outlook: French Non-Life Insurance ((Bangalore Ratings Team, Hotline:+91 80 4135 5898 Jyothsna.BN@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Jyothsna.BN.thomsonreuters.com@reuters.net))