Moody's has put the insurance financial strength and long-term debt ratings of Royal & SunAlliance (R&SA) and Swiss Re "on review for possible downgrade" as a result of the terrorist attacks in the US.
The rating agency said it expected insurers' losses from the attacks to be significant and their ratings had to reflect this. But it added that the losses did not pose a threat to solvency.
It said R&SA and Swiss Re were not the only rated insurers to have had their outlooks changed and, although each insurer's situation was different, concerns were common to all of them.
These include the magnitude of the actual losses reported, both gross and net, relative to capitalisation, fixed charges, cash flows, and core earnings; the degree of uncertainty surrounding current estimates of loss, including the prospect for disputes about the extent to which reinsurance will respond; and the extent to which the profile of risk within the insurance industry has changed.
