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Insurance ratings actions: Fitch downgrades Cigna, subsidiaries

S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5 p.m. ET. Actions after 5 p.m. ET will be included in the following day's roundup.

U.S. and Canada

Demotech Inc. assigned a financial stability rating of A, Exceptional, to California Casualty Insurance Co., California Casualty & Fire Insurance Co., California Casualty Indemnity Exchange, California Casualty General Insurance Co. of Oregon and California Casualty Compensation Insurance Co.

The rating is assigned to insurers with exceptional financial stability related to maintaining positive surplus as regards policyholders, liquidity of invested assets, an acceptable level of financial leverage, reasonable loss and loss adjustment expense reserves and realistic pricing.

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Fitch Ratings downgraded Bloomfield, Conn.-based Cigna Corp.'s issuer default rating to BBB from A- and lowered the company's short-term issuer default rating to F3 from F2.

The rating agency further downgraded the insurer financial strength ratings to A (Strong) from A+ of Cigna's operating subsidiaries, Connecticut General Life Insurance Co., Life Insurance Co. of North America, Cigna Life Insurance Co. of New York and Cigna Worldwide Insurance Co.

All ratings were removed from Rating Watch Negative and assigned a stable outlook, Fitch said.

Fitch's ratings action coincides with Cigna's financing of up to $24 billion in new debt related to the pending purchase of Express Scripts Holding Co. in a cash-and-stock transaction that is expected to close in the fourth quarter. Upon closing of the transaction, it is anticipated that all debt will be cross-guaranteed. About $3 billion in debt is not mandatorily redeemable should the deal fail to close.

Europe

Fitch affirmed China Taiping Insurance (UK) Co. Ltd.'s insurer financial strength rating at A- (Strong) with a stable outlook.

The rating reflects the benefits of the company's ownership by China Taiping Insurance Group Ltd. The benefits are reflected in a two-notch uplift to the U.K. insurer's stand-alone credit profile of BBB.

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