Marketwatch has the story:
S&P said it lowered its counterparty credit and financial strength ratings on 10 groups of U.S. life insurers, and its counterparty credit ratings on seven U.S. life insurance holding companies.
“In response to the extreme pressures in the global economy, we recently published criteria that outlined the incremental stress analysis we are now applying to U.S. insurers’ bond holdings, commercial mortgages, and commercial mortgage-backed securities when we assess these companies’ capital adequacy,” S&P said.
The ratings firm added that, “Although today’s rating actions reflect our opinion of a general decline in the overall creditworthiness of the U.S. life insurance sector, we continue to believe the credit fundamentals of the life insurance industry are strong.”
Insurers affected by the ratings changes include Conseco Inc., which saw its counterparty credit rating cut to CCC, denoting very weak security characteristics. Genworth Financial Inc. saw its rating cut to BBB, denoting good but more likely to be affected by adverse business conditions than higher-rated insurers, while Hartford Financial Services Group Inc.’s rating was cut to BBB+
The S&P report, which can be found here if you sign up for a free account has many salacious tidbits backing what I’ve been saying for several weeks now on a topic we’ve blogged about for months beginning with Senate Majority Leader Harry Reid’s welcome here last fall. Here are some excerpts:
Standard & Poor’s also said that it placed its ratings on two groups of U.S. life insurers, one of which was also downgraded, on CreditWatch with negative implications. At the same time, Standard & Poor’s revised its outlook on an additional U.S. life insurer to negative from stable……………. Continue reading “BREAKING: S&P Downgrades 10 Life Insurers. Death Rattles Reportedly Heard in Hartford Connecticut”