ANALYSIS AND KNOWLEDGE FOR THE WORLD OF INSURANCE

Archive for the All Category

Will ratings hinder reinsurer M&A and the hedge fund ‘play’?

Will ratings hinder reinsurer M&A and the hedge fund ‘play’?

In the investment banker ‘101’ playbook for cyclical industries the reinsurance industry has arrived at the page marked ‘weak pricing due to too much competition; sell M&A services to our clients’. This, if you are a banker, can be a very nice place to be.  Less so

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Mapfre and Generali’s S&P ratings; a stress too far?

Mapfre and Generali’s S&P ratings; a stress too far?

S&P’s ratings of Mapfre and Generali have been among the most contentious major insurance group ratings of recent years, due to the impact of S&P’s sovereign ratings for Spain and Italy respectively. While some other ratings were clearly and specifically dragged down by their direct exposure to

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Reinsurer downgrades on the cards for 2014; these may be very controversial

Reinsurer downgrades on the cards for 2014; these may be very controversial

On the 20th January, S&P announced that – for the first time since 2006 – it expects a negative trend in reinsurer ratings in 2014. Of the 23 groups (including ‘Lloyd’s) it defines as ‘global reinsurers’ it notes that ‘nearly half’ are materially exposed to the competition

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How should brokers react to downgrades to BBB?

How should brokers react to downgrades to BBB?

Recent rating downgrades and the risk of this continuing have focussed the attention of many brokers on an old problem; how, if they use ‘A-‘ as a minimum level of automatic acceptability, should they react to a downgrade of a former ‘A range’ carrier to the ‘BBB

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Down, Down, Down – Ratings Trigger Clauses and the Spiral of Descent

Down, Down, Down – Ratings Trigger Clauses and the Spiral of Descent

With the backdrop of the approaching New Year and many insurance and reinsurance policies being renewed at 1.1., it seems that we will no doubt see the use of “ratings downgrade trigger clauses” reach another high. The ability of individual re/insurance buyers to cancel a policy ab-initio

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RSA’s S&P rating remains seriously at risk even after second downgrade

RSA’s S&P rating remains seriously at risk even after second downgrade

Following S&P’s initial downgrade last month we noted that RSA faced a further risk to its rating without fresh equity.  This reflected the fact that even prior to its recent problems RSA’s prospective capital was only consistent with an S&P ‘BBB’ range financial strength rating. At that

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SCOR joins exclusive club with highest S&P ERM score; but what do ERM assessments actually mean?

SCOR joins exclusive club with highest S&P ERM score; but what do ERM assessments actually mean?

On the 21st November S&P moved its ‘A+’ rating for SCOR’s core carriers to a positive outlook.  A return to the ‘AA’ range would highlight the remarkable transformation of the group’s profile from the difficult position it found itself in a decade ago. SCOR’s path to recovery

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Without fresh capital RSA’s S&P rating may be downgraded further to ‘A-‘

Without fresh capital RSA's S&P rating may be downgraded further to 'A-'

On Wednesday 13th November S&P downgraded RSA’s financial strength rating to ‘A’ from ‘A+’ and placed it on credit-watch negative. Financial strength ratings (FSRs) are those related to policyholder credit risk. These ratings, and particularly those from S&P and A.M. Best, remain critical carrier selection criteria for

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Reinsurers and GSII: Global, certainly; important, for sure; but ‘systemically’ risky?

Reinsurers and GSII: Global, certainly; important, for sure; but ‘systemically’ risky?

The IAIS, with its proposal for additional risk-adjusted capital rules for major re/insurers, seems to be joining the regulatory bandwagon for seeing these as a potential source of threat to to the global financial system. However, other than when they choose to act as ‘shadow banks’, the

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Lloyd’s on the cusp of ‘AA’ range ratings; this could be a game-changer

Lloyd's on the cusp of ‘AA’ range ratings; this could be a game-changer

During the summer both A.M. Best and Fitch assigned ‘positive’ outlooks to their current Lloyd’s market ratings. S&P did so last year. Translating the A.M. Best rating scale to the one used by S&P and Fitch this means that Lloyd’s is rated ‘A+’ with a positive outlook

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