S&P Report Says U.K. Auto Insurers Use of Prior-Year Reserves ‘Unsustainable’

September 8, 2008

Standard & Poor’s Ratings Services has issued an analysis of the U.K. motor insurance industry’s reported results, which concludes that “healthy reported numbers continue to hide high releases from prior-year reserves.”

“The stable performance indicated by the headline results, as measured by insurers’ combined ratios, are supported in most cases by ever-increasing sums from prior-year reserves,” explained credit analyst Nigel Bond. “Accident-year performance for the motor market has been worsening steadily and the accident-year combined ratio has been consistently higher than 100 percent since 2003.”

The report – “Premium Rate Increases Needed To Tow U.K. Motor Insurance Industry Out Of The Red” – is available to subscribers of RatingsDirect, the real-time Web-based source for S&P’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.

Alternatively, call one of the following Standard & Poor’s numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow (7) 495-783-4017.

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