Creditworthiness of European rated insurers is unlikely to be affected when they will have to reveal, for the first time starting in May 2017, the extent to which their Solvency II ratios are enhanced by various measures, including transitionals and long-term guarantee measures, says Moody’s Investors Service in a report published today. The disclosures are part of insurers’ compliance reporting under the new capital regime.
Moody’s report, “Insurers — Europe: New Solvency II disclosure to provide insight, but unlikely to change our credit view,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.
Continued Reading “Moody’s: Solvency II regulatory disclosures unlikely to affect European insurers’ credit quality” at EconoTimes
London, 24 March 2017 — Moody’s Investors Service has today assigned a Ba2(hyb) rating to the SEK2.5 billion/DKK650 million perpetual restricted Tier 1 contingent convertible notes (“notes”) to be issued by RSA Insurance Group plc (“RSA” or “Group”; backed subordinated rating Baa1(hyb), stable outlook).
Moody’s approach to rating “high trigger” contingent capital securities is described in its Global insurance rating methodologies (Global Property and Casualty Insurers: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_190302).
The notes rank junior to RSA’s senior creditors (including Tier 2 capital) and existing preference shares, but they rank senior to common shares. Coupons may be cancelled on a non-cumulative basis at the issuer’s option and on a mandatory basis if the Group’s solvency capital requirement is breached.
Continue Reading “Moody’s assigns Ba2(hyb) rating to RSA’s SEK2.5 billion/DKK650 million perpetual contingent convertible notes” at Moody’s
London, 23 September 2016 — Moody’s Investors Service has today upgraded SCOR SE’s insurance financial strength rating to Aa3 from A1 and its subordinated debt rating to A2(hyb) from A3(hyb).
The outlook is stable. Moody’s also upgraded the ratings of various SCOR SE subsidiaries.
A list of all ratings affected by this rating action is available at the end of this press release.
SCOR SE (“SCOR“) is one of the largest global reinsurance groups. It reported gross premiums written of EUR13.4 billion in 2015 and shareholders’ equity of EUR6.4 billion as of 31 December 2015.
Continue Reading “Moody’s upgrades SCOR’s insurance financial strength rating to Aa3; stable outlook” at Moody’s
London, 07 September 2016 — Moody’s Investors Service has today assigned a Baa1(hyb) rating to the GBP400 million subordinated debt issued by Aviva Plc under its GBP7 billion Euro Medium Term Note (EMTN) programme.
The Baa1(hyb) rating reflects (i) the subordination of the debt, (ii) the optional and mandatory weak coupon deferral mechanisms and (iii) the cumulative nature of deferred coupons, in case of deferral.
Moody’s says that the rating is one notch below the (P)A3 senior debt MTN rating of Aviva Plc, which is in line with Moody’s standard notching practices.
Continue Reading ” Moody’s assigns a Baa1(hyb) rating to Aviva’s GBP400 million dated Tier 2 debt” at Moody’s
According to Moody’s Investors Service, the UK life industry is in a better position than a year ago despite radical changes to the retirement landscape following pension reforms.
Moody’s views the UK opting to leave the European Union (Brexit) as the main potential short-term risk to the stability of the sector.
However, the negative impact on insurers’ credit fundamentals is expected to be relatively modest, as Moody’s previously stated in a May report.
“UK life insurers are adapting well to the new environment and are generally well set up to exploit increased savings opportunities and the demand for risk products”, said Dominic Simpson, Moody’s Vice President and Senior Credit Officer. “This is notwithstanding regulatory and political headwinds which we expect to be a feature for some years”.
Continue Reading ” MOODY’S: Despite Radical Changes, UK Life Insures Are Adapting Well To Challenging LANDSCAPE ” at EconoTimes
London, 20 May 2016 — Moody’s Investors Service has today affirmed Kommunal Landspensjonkasse (KLP)’s A2 IFS (Insurance Financial Strength) rating and Baa1(hyb) subordinated debt rating.
The rating agency has also changed the outlook to stable from negative.
The change of outlook to stable from negative reflects KLP’s material strengthening in capitalisation over the last two years, with the parent/main operating company reporting a Solvency II capital ratio of 197% as at 1Q 2016 (on a standard formula basis and without transitional measures), while the group has reported 190% on the same basis.
Continue Reading at Moody’s News
Solvency II ratio comparability is being hindered by insurers ability to use one or more methods to enhance their ratios, according to Moody’s.
The US rating firm said in a new report that the use of internal models creates potential for inconsistent assumptions.
Methods to enhance ratios that have been used so far, according to Moody’s, include transitional measures and third country equivalence.
The rating firm said ratio comparisons are limited by diverging choices about whether to include volatility or matching adjustments in the liabilities’ discount rate. It also said that there have been very few disclosures that quantify the impact of these enhancements.
Continue Reading “Solvency II ratio comparisons limited by diverging choices: Moody’s” at Intelligent Insurer News
Global Credit Research – 10 Dec 2015
Paris, December 10, 2015 — According to Moody’s Investors Service, reported Solvency II ratios will not always reflect economic capitalisation of insurers. In fact Solvency II ratios may underestimate or overestimate insurers’ actual economic capitalisation because of the challenges in calibrating all risks on a pure economic basis at a 99.5% confidence level and the impact of the transitional measures agreed to smooth Solvency II implementation. As a result, the emphasis that Moody’s will place on Solvency II ratios in its assessment of insurers’ capitalisation will vary, notably by category of insurer.
Moody’s report titled “European Insurance: Solvency II Ratios Will Not Always Reflect Economic Capitalisation” is now available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release.
In the Solvency II Directive, which comes into force on 1 January 2016, capital requirements are defined as the amount of resources needed to absorb all economic losses with a probability of 99.5%. “On the basis of this economic approach, we have evaluated that a 100% Solvency II ratio is consistent with a low Baa level of capitalisation and a 200% ratio is consistent with a low Aa level of capitalisation”, said Benjamin Serra, Moody’s Vice President and Senior Credit Officer. “However, the calibration process and transitional measures have partly taken the Solvency II ratios away from a pure economic view”, added Mr Serra.
Continue reading Announcement: Moody’s: Solvency II ratios will not always reflect economic capitalisation
Paris, September 09, 2015 — Significant changes to insurance regulation will increase risks in the medium term for investors that hold hybrid debt instruments issued by European insurance companies, Moody’s Investors Service said in a report published today.
The report, “European Insurance: Moving regulatory frameworks create risks for hybrid bondholders”, is now available on www.moodys.com. Moody’s subscribers can access this report via the link at the end of this press release.
From 1 January, 2016, European insurers will have to comply with the new Solvency II rules. In addition, Internationally Active Insurance Groups (IAIGs) and Global Systematically Important Insurers (G-SIIs) will be subject to additional capital requirements from 2019.
While the details of all these new regulatory frameworks have yet to be finalised, Moody’s anticipates that calibrations of required capital and definitions of eligible capital under the future regimes will differ significantly from Solvency I, the current regulatory regime.
Continue Reading “Moody’s: Holders of hybrid bonds issued by European insurers face increasing risks from new regulatory frameworks” at Moody’s News
So from what I can gather it has been a terrible week for the Girondins, with a freak hailstorm wreaking havoc in a thin strip along the vineyards of Bordeaux’s Entre-deux-Mers appellation – my in-laws were seemingly spared further down the river, noting that it was merely “un peux froid“. And speaking of a great deal of hard work getting aimlessly destroyed by an unpredictable European storm, Solvency II (do you see what I did there?) appears to have at least enough juice in the tank to have encouraged Moodys to survey practitioners on the preparedness of the industry to achieve compliance before the deadlines currently on everyone’s lips (i.e. 2014-2015 for EIOPA Guidelines, 2016 for “go-live“).
Continue Reading “Moody’s Survey on Solvency II Compliance Preparedness – The Chilly Third Pillar” at Governance Matters…On Solvency II