Rating agency warns Irish companies of insurers face downgrade because of sovereign debts and banks

Rating agency Standard & Poor’s (S&P) warns the Irish companies of Allianz, Aviva and RSA could have their credit worthiness damaged by the crisis engulfing Ireland.

Allianz has already had its A ratings placed on negative watch.

S&P says Allianz plc, Allianz Worldwide Care Ltd, Aviva Insurance SE, and RSA Insurance Ireland Limited are potentially exposed to either sovereign debt or the bank troubles. Their ratings face been downgraded.

The crisis in Ireland has seen the Government accept an EU bailout and swallow severe austerity cuts.

The damage to the economy from the over-bloated banking sector led to S&P downgrading its sovereign credit ratings to 'A/A-1' from 'AA-/A-1+'.

A statement said: “We believe that these rating actions could have a negative impact on the creditworthiness of five Ireland-based insurers, because of their potential exposure to sovereign local currency debt and/or Ireland-based banks. Namely these are: Allianz plc (A/Stable/--), Allianz Worldwide Care Ltd. (A/Stable/--), Aviva Insurance SE (A+/Developing/--), Irish Life Assurance PLC (BBB+/Negative/--) and RSA Insurance Ireland Ltd. (A-/Stable/--).

"We expect to publish a more detailed analysis and any impact on the credit rating on these insurers as soon as permitted to do so under applicable EU law. The delay in our communication is to meet the requirements of EU credit rating agency regulation.”

Read our subscriber exclusive: How will insurers be affected by the debt crisis in Ireland?