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How U.S. Property/Casualty Insurers And Reinsurers Are Managing Their Capital Through Volatile Markets Jul 10
Standard & Poors, July 2010
Abstract
The U.S. property/casualty (P/C) insurance industry's level of capital surplus has experienced unprecedented volatility in recent years. But according to Standard & Poor's Ratings Services' proprietary capital model, most insurers in the sector had more than adequate capital for the ratings as of year-end 2009. How should P/C insurers manage their balance sheets at a time when most have redundant capital? What's the proper equilibrium for their dividend payments, share repurchases, and mergers and acquisitions (M&A)? And what about the potential need for additional capital, the uncertainty of future investment volatility, the risk of a major natural catastrophe, and the sustainability of loss reserve releases? Industry executives recently addressed how P/C insurers and reinsurers manage their capital, taking into consideration...
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.
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