Fitch affirms German Condor's IFS

The agency has also affirmed Optima Pensionskasse AG's IFS rating at 'A-'. The outlook for all ratings is Stable. These companies form the Condor insurance group.

Fitch has simultaneously withdrawn CA, OV and OP's ratings as the ratings are no longer considered by Fitch to be relevant to the agency's coverage.

The affirmation reflects the successful integration of Condor into R+V insurance group following the latter's acquisition of Condor.

Fitch expects that Condor will play a key role in generating business via independent financial advisors for R+V. Condor derives its insurance business solely through independent financial advisors, while R+V distributes its life products mainly through cooperative banks. Fitch currently views Condor as very important to R+V.

For life insurance, CL's new business volume increased 18.5% to E454.2m in 2010, higher than the German market average. Fitch expects a further strong increase in new business volume in 2011. CL's net investment return rate (4.4%) was in line with the German life insurance market average in 2010.

In non-life insurance, CA's gross written premiums increased by 5.7% to E97.5m in 2010 while the German non-life insurance market grew by 0.5%. The gross combined ratio increased to 102.0% from 94.9%. CA was hit by a single large claim in extensive coverage line and the harsh winter affected the home insurance line. Motor insurer OV's GWP increased 1.4% to E24.7m. OV reported strong underwriting profitability despite Germany's motor competition. OV had a gross combined ratio of 90.5% in 2010 while the motor market is expected to report a gross combined ratio higher than 105%.

Fitch views Condor's capitalisation as strong. As part of Condor's rating review, Fitch also assessed the credit quality of R+V. Under Fitch's group rating methodology, Condor benefits from a one-notch uplift from its standalone credit profile. However, a change in CL's strategic importance within R+V could result in a downgrade. Due to the relative size of CL within R+V, an upgrade of the rating is unlikely in the near term.

Wiesbaden-based R+V is one of the top ten insurance groups in Germany. R+V is a non-listed company 74%-owned by DZ Bank AG ('A+'/Stable), Germany's largest central bank of cooperatives.

DZ Bank AG had total assets of E383.5bn at end-2010. R+V had GWP of E11.1bn in 2010 and total assets of EUR64.8bn at end-2010. CL reported GWP of E212.0m (2009: E236.1m) in 2010 and had total assets of E3.2bn (2009: E3.1bn) at end-2010.