S&P pendulum swings for insurance sector

The change comes because the ratings agency has decided challenges to insurance companies are largely priced in to their market values and financial strength ratings. Although regulation has contributed to the difficult times, it has also resulted in “more informed decisions regarding products and asset-liability management,” S&P says. For example, the use of “guarantees” has changed from being a marketing tool to becoming financial options valued by reference to the hedging costs incurred. These additional costs are now being included in the product pricing, or else such products ...