The ratings on Italian insurer Società Cattolica di Assicurazione (Cattolica) reflect Standard&Poor's Ratings Services' view of the group's strong P/C operating performance, strong competitive position in the Italian market, and strong financial flexibility. Partly offsetting these credit strengths is our assessment of Cattolica's weakened capital adequacy and only good life operating performance. In a very difficult market for P/C in Italy, particularly for the motor business where performance has deteriorated severely, Cattolica posted a net combined ratio of 97.5% for full-year 2009, improving from 99.4% at year-end 2008. In addition, we believe that first-half results for P/C confirm this improvement: Cattolica reported a net combined ratio of 97.7% versus 97.5% in the first half of 2009. We believe
