Ratings agency says financial strength ratings will be unaffected

Ratings agency Standard & Poor’s has said it does not expect ongoing flooding in southern England to negatively change the financial strength ratings of UK general insurers.

Estimates of the cost to insurers has ranged from £500m to £1.2bn.

S&P said the high end of those estimates would add 4 percentage points to insurers’ combined ratios.

“We would view such a loss as an earnings event rather than a capital event,” it said in a statement.

“Even if political pressure were to hinder insurers from recovering the full extent of their flood losses through raising premiums, we would not expect it to change our assessment of the U.K. non-life sector’s industry and country risk.”