S&P Reports ‘Pressure Builds on Europe’s Insurers,’ Despite Strength

Standard & Poor’s Ratings Services has issued a new report, – “Europe’s Insurers Feel The Strain, But The Sector Retains Its Strength” – which indicates that for many insurers, market conditions over the past 18 months have “eroded the headroom in ratings that they had enjoyed at the time of our previous report card.”

S&P said that “despite this, most rating actions in the first quarter of 2009 were limited to one notch.” Credit analyst Rob Jones added: “We continue to believe that the fundamentals of Europe’s insurers are sound despite the market value-based indicators, which may imply otherwise.”

S&P also indicated that “negative rating action and negative outlooks appear mainly associated with insurers with a life insurance bias, especially those with large U.S. subsidiaries, or a large exposure to structured credit or equity risk.

“Maintenance of stable outlooks or positive rating actions are mainly associated with insurers having a European non-life bias, especially reinsurers. The exception to this appears in cases where these non-life insurers have a large exposure to equities, such as in the Gulf region.”

The report is available to RatingsDirect subscribers 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