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Bond Insurers' Capital Adequacy Improves as Challenges Prove Manageable
Standard & Poors, June 2004
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Abstract
Capital adequacy in the bond insurance industry registered sound improvement on average in 2003, although, as is the case every year, individual company results showed some variability due to company-specific factors. Among the more potent threats identified in 2002 that could have inflicted more damage in 2003 had they continued or intensified were global economic weakness that challenged credit quality across many sectors of the economy, record levels of corporate defaults, and significant changes in the availability of reinsurance. In each case, the challenge in fact either receded on its own or the insurers were able to find innovative solutions. Also contributing to the maintenance of sound capital adequacy for certain insurers were capital infusions from their parent companies, existing...
Companies mentioned in this report are: Ambac Assurance Corp.,Financial Guaranty Insurance Co.,Assured Guaranty Municipal Corp.,Radian Reinsurance Inc.,MBIA Insurance Corp.,Assured Guaranty Corp,Radian Asset Assurance Inc.,RAM Reinsurance Co Ltd.,Syncora Guarantee Inc.,Syncora Guarantee Re Ltd.,Sompo Japan Financial Guarantee Insurance Co. Ltd.,CIFG GUARANTY,Channel Reinsurance Ltd
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