Fitch is wrong. That is the view put forward by the FSA's managing director for consumer, inv...
Fitch is wrong.
That is the view put forward by the FSA's managing director for consumer, investment and insurance issues John Tiner in his written response to the credit ratings agency's statements on the state of the UK insurance industry.
He says that Fitch has misunderstood the difference between the probability of risk and the impact that that risk could have were it to materialise.
It is the combination of both probability of risk and impact that the FSA uses to determine an overall measure of risk in relation to any one insurance provider.
In turn this means a large company could be categorised as "high impact" but actually carry a low risk of, for example, breaking solvency regulations.
Therefore, Tiner says, the 200 companies identified as "high impact" by Fitch are far from all be high risk ones, as is implied by the agency's report.
"It is also important to note that the insurance sector is not being singled out for special treatment," Tiner says.
"We are carrying out risk assessments for all the larger firms we regulate, as we have explained on many previous occasions."
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