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Bond Insurance Capital Adequacy Trends Are Exhibiting Stability Jul 05
Standard & Poors, July 2005
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 results in the bond insurance industry were sound in 2004. There were no 'headline' type events during the year, unlike in recent years, which saw the downgrades of several reinsurers to the industry and corporate credit deterioration that caused CDO losses and led to higher capital charges. Nor were there any capital-consumptive, non-credit developments, such as in 2002, when Standard & Poor's Ratings Services made conservative revisions to reinsurance capital modeling criteria. From a capital adequacy standpoint, the past year was rather tranquil, with the large majority of companies possessing capital adequacy margins of safety in comfortable excess of the minimum requirements for their rating levels. However, a calm surface sometimes belies a turbulent undercurrent. The industry is...
Companies mentioned in this report are: Wachovia Corporation,General Electric Capital Corp.,Ambac Assurance Corp.,Financial Guaranty Insurance Co.,Assured Guaranty Municipal Corp.,Radian Reinsurance Inc.,MBIA Insurance Corp.,Sompo Japan Insurance Inc.,Assured Guaranty Corp,Radian Asset Assurance Inc.,ACA Financial Guaranty Corp.,Assured Guaranty Re Ltd.,Syncora Guarantee Inc.,Sompo Japan Financial Guarantee Insurance Co. Ltd.,CIFG GUARANTY,CIFG Europe,CIFG Assurance North America, Inc,BluePoint Re Limited
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