Australian insurer QBE's credit rating has been downgraded by Standard & Poor's following the terrorist attacks in the US, raising the possibility of similar action being taken on other insurers.
The company's rating was lowered from single A plus to single A.
Standard & Poor's warned on Tuesday that “many insurers and reinsurers with exposures to the tragic loss at the World Trade Center” were likely to be put on creditwatch with negative implications.
Michael Vine, director of financial services ratings for Standard & Poor's said: “The strong business and financial position of QBE has been severely impacted by the underwriting exposure to these events, which the company estimates will largely wipe out the market-consensus forecast net profit of A$265m for the year ended December 31, 2001.”
He warned the group may have to raise capital under difficult conditions to support its future growth and added: “Although QBE has very strong reinsurance protection in place, its covers may be inadequate in the areas of aviation liability and personal accident.”
