S&P Finds European Insurance Holds Up Despite Market Conditions

Standard & Poor’s Ratings Services has published its latest findings on the state of European insurers. It concludes that for the most part, “with the exception of the relatively small number of bancassurers, they have proved their resilience in 2007 and the first half of 2008.”

However, S&P’s report – “European Insurance Sector Ratings Remain Stable Despite Poor Results In The Third Quarter” – notes that the “third quarter of 2008 has taken its toll on insurer balance sheets.”

S&P credit analyst Simon Marshall explained that, “based on current conditions and our medium-term expectations, we believe that the majority of insurers can maintain their resilience following these negative developments, although there could be an increasing number of exceptions if financial and economic conditions deteriorate more than expected.”

Although S&P noted that “many insurers are expected to post losses for the year,” it added that so far “rating actions in this sector have been modest, given the capital strength and liquidity of the industry.”
“If insurers’ balance sheets continue to weaken, either on the asset or liability side, the resilience of insurer ratings exhibited so far will likely be challenged,” Marshall added. “In this case, the outliers that would emerge may attract outlook or rating changes.”
T
he report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor’s credit ratings, research, and risk analysis, at: www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to: research_request@standardandpoors.com. Ratings information can also be found on S&P’s public Web site at: www.standardandpoors.com;

Source: Standard & Poor”s