A message for the rating agencies One of the key elements of the rating process is ‘competitive position’, which for reinsurers refers to their ability to attract and retain business in a tough market place. The rating agencies understandably tend to believe that ‘pricing power’ is vital
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Those in the insurance sector live or die by their appreciation and calibration of the risks they cover for various types of customers and counterparties. But many don’t have the data that enables them to properly manage one of their own biggest risks – the sustainability of
Read more →One of the most controversial aspects of rating agency activity seems to be dying a slow but inevitable death. On Tuesday S&P announced the withdrawal of almost all its entire North American and EMEA ‘pi’ (public information based) insurance ratings. This amounted to 38 ratings withdrawals in
Read more →S&P’s forecast for Lloyd’s results; the first explicit sign of a much more bearish view of sector earnings. Since January the rating agencies have become increasingly negative on their outlook for ratings in the reinsurance sector overall, while in practice affirming or even increasing individual reinsurer* ratings.
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It’s easy to speculate that the rating agencies might not give a Mutual (or cooperative) insurer the credit they deserve in the rating process; that an agency may appear more familiar or comfortable with listed shareholder (stock) companies and that a shareholder company capital structure and profit
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Since the disappointing pricing at the 1.1. renewal the bad news on reinsurance pricing has kept on coming. April, June and July renewals were all reported as materially down by the major brokers. S&P adopted a ‘negative trend’ in its reinsurer ratings in direct response to the
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