Standard & Poor’s Ratings Services has lowered its counterparty credit and insurer financial strength ratings on the UK-based Congregational & General Insurance PLC to ‘BB+’ from ‘BBB-‘. S&P also placed its ‘BB+’ rating on the company on CreditWatch with negative implications. “The downgrade primarily reflects poorer-than-expected underwriting and investment performance, further deterioration of the capital base, and management’s high financial risk tolerance explained credit analyst Tatiana Grineva. “The CreditWatch placement reflects uncertainty regarding implementation of the stated company strategy.” S&P said the ratings are “constrained by Congregational & General’s marginal operating performance, marginal capital adequacy, and marginal competitive position. The ratings remain underpinned by robust competitive position within its core, but very small and diminishing, niche commercial property market. Despite improvement, its underwriting performance to date, in the current financial year, remains unprofitable and investment returns were hampered by weak and volatile equity markets. This has led us to have serious doubts about the company’s ability to organically rebuild its capital.
Standard & Poor’s Ratings Services has assigned its ‘A-‘ insurer financial strength and counterparty credit ratings to United Arab Emirates-based insurer Abu Dhabi National Insurance Co. P.S.C. (ADNIC) with a stable outlook. “The ratings on ADNIC reflect very strong capitalization, strong earnings, and very strong liquidity,” stated credit analyst Kevin Willis. S&P said these strengths “are in part offset by the very high dependence on reinsurance, both to protect the earnings and to promote the competitive position, and the relative narrowness of the competitive position derived largely within Abu Dhabi.” Willis added that “ADNIC will maintain very strong capitalization with strong operating results, delivering a combined ratio better than 75 percent.”
Was this article valuable?
Here are more articles you may enjoy.