Standard & Poor's (S&P) Ratings Services has said it has placed its 'BBB+' long-term counterparty credit rating on Bermuda-based Aspen Insurance on CreditWatch with negative implications.
At the same time, S&P placed its 'A' long-term counterparty credit and insurer financial strength ratings on UK-based Aspen Insurance on CreditWatch with negative implications.
S&P credit analyst Marcus Rivaldi said: "The CreditWatch placement follows Aspen's update today on its assessment of losses sustained from Hurricane Katrina and the resultant New Orleans flood."
The group's estimated gross loss has been substantially increased to a range of approximately $840m-$925m, from a previous estimate of $590m. As a result, Aspen's net loss has moved to a range of $325m-$400m from a previous estimate of approximately $150m.
S&P will meet Aspen's management, and expects to resolve the CreditWatch status within 90 days.
"Issues that will need to be addressed include the continuing uncertainty surrounding the ultimate cost of the Hurricane Katrina and New Orleans flood loss, the impact of the loss on Aspen's capitalisation and the group's ability to take advantage of market opportunities arising from the 2005 hurricane season, and how the loss reflects on group risk management, modeling, and pricing capabilities," said Rivaldi.