Overview

     

    Insurer Financial Strength A- Stable outlook
    Long-term Issuer Default Rating BBB+ Stable outlook
    Subordinated Debt Rating BBB-  

    Last review May 19th 2020

     

    Last key dates

    • On May 19th 2020, Fitch Ratings affirmed Ethias's Insurer Financial Strength (IFS) Rating at 'A-' with a stable outlook. The rating actions are based on Fitch’s current assessment of the impact of the Coronavirus pandemic. The ratings primarily reflect Ethias's strong capitalization and leverage, good profitability and strong business profile. Fitch continues to view Ethias as strongly capitalized for its current rating, with financial capital ratios marginally weaker than those reported in 2019 results. The Fitch rating case analysis suggests manageable Covid-19 related claims and Fitch underlines that Ethias has a strong balance sheet liquidity position.
    • In March 2020, after examining the macroeconomic situation and the prospects for many companies in the wake of the Covid-19 health crisis, within the framework of its "event driven" rating committee, the agency took the decision to bring the ratings of a whole series of companies with a positive outlook to a stable outlook. In this context, the outlook of Ethias' "A-” rating therefore goes from positive to stable.
    • On the 13 of august 2019, Fitch has revised Ethias’ Outlook to Positive from Stable. The Positive Outlook reflects Fitch's expectation that the company will maintain its strong capitalisation and financial leverage ratio (FLR) in 2019. The group has begun to build a track record of stability following the completion of a multi-year action plan that has resulted in a strengthening in capitalisation, financial flexibility and asset-and-liability risk management. 
    • On the 22nd of January 2019, Fitch has upgraded Ethias S.A.'s Insurer Financial Strength (IFS) rating to A- from BBB+. The upgrade follows the full repayment of Vitrufin's debt on 16 January 2019 and the full disposal of Ethias's capital-intensive individual life portfolio in september 2018. In Fitch's view, these two achievements mark the completion of a multi-year action plan that has resulted in a strengthening in capitalisation, financial flexibility and asset and liability management risk.
    • On the 12th of June 2018, Fitch has revised Ethias’ Outlook to Positive from Stable while affirming the Insurer Financial Strength (IFS) rating at BBB+ in order to reflects Fitch's view that the likely full repayment of Vitrufin debt and the full disposal of the insurer's capital-intensive individual life portfolio will lead to a strengthening in Ethias's capitalisation, profitability and financial flexibility.
    • On the 27th of June 2017, Fitch has upgraded Ethias’ Insurer Financial Strength (IFS) rating to BBB+ from BBB with stable outlook, in order to reflect the completion of Ethias’s recovery plan in May 2017 and resulting strengthening of capital profile and reduced exposure to interest rate risk.
    • On the 10th of January 2017, Fitch affirmed Ethias' Insurer Financial Strength rating at BBB with positive outlook, in order to reflect the success of the Switch VI operation that enables the company to improve its capital position and to reduce its sensitivity to interest rate changes.
    • On the 12th of September 2016, Fitch placed Ethias' Insurer Financial Strength rating on Rating Watch Positive (RWP) to reflect Ethias's announcement of a plan aimed at strengthening its Solvency II position and reducing its sensitivity to changes in interests rates.
    • On the 14th of October 2015, Fitch downgraded Ethias’ Insurer Financial Strength rating from BBB+ to BBB to reflect the increase of the financial leverage ratio resulting from the issuance of additional notes on the 5th of November 2015 (mechanical downgrade).
    • On the 25th of September 2015, the rating agency Fitch affirmed Ethias’ Insurer Financial Strength rating at BBB+ with stable outlook.

     

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    Last full report

     

    In its last full year report dated August 2019, Fitch recognizes the strong level of capitalisation of Ethias, its good profitability and the reduction of its duration gap.

    Selected extracts from Key Rating Drivers :
     


    The positive outlook reflects Fitch’s expectation that the company will maintain its strong capitalization.

     

    “The group has begun to build a track record of stability following the completion of a multi-year action plan that has resulted in a strengthening in capitalization, financial flexibility and asset and liability risk management

     

    “The ratings primarily reflect Ethias's strong capitalisation and leverage, good profitability and strong business profile.”

     

    Ethias’sPrism FBM score was at the upper end of the 'Very Strong' category at end 2018, well in excess of the ‘A’ benchmark.

     

    “Ethias’s FLR was stable at approximately 20% at end 2018.”

     

    “Ethias reported a Solvency II capital ratio of 181% at end 2018, excluding transitional arrangements (end 2017 : 183%).”

     

    “Fitch regards Ethias's profitability as good, driven by the non-life business. Net income return on equity (ROE) was 7.7% at end 2018 (2017: 6.7%). We expect Ethias to demonstrate sustained profitability in 2019 that would be more reflective of technical results, after having been affected by non recurring items related to the company’s restructuring”.

     

    Ethias has significantly reduced its exposure to interest rate risks resulting from historically high minimum guaranteed returns on retail life technical liabilities. The duration gap is now expected to remain below 1 year.”

     

    RATING SENSITIVITIES

     

    The ratings could be upgraded if Ethias maintains a ‘very strong’ Prism FBM score and a stable FLR, while return on equity remains stable”.

    Fitch, August 2019


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    The evolution of the rating of Ethias SA is the following: 

    Date Insurer Financiel Strength (IFS) Insurer Default Rating (IDR) Outlooks
    19/05/2020 A- BBB+ Stable outlook
    19/03/2020 A- BBB+ Stable outlook
    13/08/2019 A- BBB+ Positive outlook
    22/01/2019 A- BBB+ Stable outlook
    12/06/2018 BBB+ BBB Positive outlook
    27/06/2017 BBB+ BBB Stable outlook
    10/01/2017 BBB BBB- Positive outlook
    12/09/2016 BBB placed on RWP BBB- placed on RWP  
    14/10/2015 BBB BBB- Stable outlook
    25/09/2015 BBB+ BBB Stable outlook
    17/12/2014 BBB+ BBB Stable outlook
    30/07/2014 BBB+ BBB Stable outlook
    13/02/2014 BBB BBB- Stable outlook
    25/06/2013 BBB BBB- Stable outlook


    The rating of subordinated debts is the following:

    Issue date Program ISIN Code Rating
    05/11/2015

    EUR 170.8M tap issue of dated subordinated notes due 2026

    BE6279619330 BBB-
    14/07/2015 EUR 231.9M fixed rate dated subordinated notes due 2026 BE6279619330 BBB-
    20/12/2015

    EUR 14M fixed/floating rate subordinated undated bonds

    BE0930906947 BBB-


    Fitch press releases & annual reports: 

    Annual reports
    October 2020
    September 2019
    July 2018
    July 2017
    September 2016
    October 2015
    September 2014
    July 2013
    Press releases
    May 2020
    March 2020
    August 2019
    January 2019
        June 2018
    January 2018
    June 2017
    January 2017
    December 2016
    September 2016
    October 2015
    September 2015
    December 2014
    July 2014
    February 2014
    June 2013

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