DIMA Clarifies S&P Ratings Bulletin on Ireland Debt, Re/insurers

Dublin International Insurance & Management Association (DIMA), the representative body for the international re/insurance industry in Ireland, announced that it has “been in contact with rating agency Standard & Poor’s to clarify the position regarding the Irish sovereign rating and its implications for international re/insurers operating in Ireland.”

S&P stated in its release “Standard & Poor’s Comments On Rating Some Irish Insurers Above The Sovereign” issued on 25 November: “Insurers that we may rate above the sovereign write most of their business with policyholders outside the financial center, hold most of their investments in a form other than local sovereign debt of that financial center, and hold most of their deposits in banks domiciled outside that financial center.”

DIMA’s bulletin explained that, as its membership is “engaged in international re/insurance, with a global client base. From DIMA’s perspective, this indicates that its members fall within the S&P criteria for companies which are rated independently of the sovereign position, and therefore generally will not see their ratings directly impacted from any changes to Ireland’s sovereign ratings.”

S&P has further clarified its ratings announcement: “The insurers concerned are typically captive insurers of corporates based outside Ireland, captive reinsurers of insurance groups based outside Ireland, or subsidiaries of global insurance groups that conduct the majority of their EU business under an Irish license. We believe such insurers’ financial strength to be independent of the financial center’s sovereign risk.”

Sarah Goddard, CEO of DIMA, commented: “Ireland has a thriving international re/insurance market, with Dublin recognized as a leading global centre for this business. I am delighted that S&P has clarified that any sovereign rating activity will not automatically have implications for international companies located in Ireland.”

Source: Dublin International Insurance & Management Association (DIMA)