Although effectively communicating the output is likely to be critical for European re/insurers Periodically we hear the comment that the required publication by EU domiciled re/insurers of details on their financial health under Solvency II (SII) may remove market demand to see re/insurer ratings. Here at Litmus, we seriously doubt that. Fundamentally the information that will be disclosed under SII will have to be interpreted by the user in order
Read more →Recently Fitch Ratings (Fitch) released a paper arguing that rating users and regulators should treat an “A-“ A.M. Best (Best) Financial Strength Rating (FSR) as equivalent to a “BBB” Fitch Insurer Financial Strength (IFS) rating, and to the “BBB” ratings of the other main Credit Rating Agencies (CRA’s)
Read more →Upgrades and downgrades are inevitable with A.M. Best’s new rating approach A.M. Best is currently in a ‘Request for Comment’ (“RFC”) period for proposed changes to its rating methodology. It is also just finalising an update to one crucial part of that, namely the capital model it
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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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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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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
Read more →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
Read more →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
Read more →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
Read more →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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