We applaud S&P downgrades of US and its insurance companies

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August 9, 2011 by Tony Novak

Following the downgrade by Standard & Poor’s of the U.S. sovereign credit rating on Friday, the credit rating agency also announced rating actions today on 10 U.S. life and health insurance companies. The following actions were announced by S&P on Monday August 8:

Five of the largest U.S. life insurance companies were downgraded from AAA to AA+ and removed from credit watch negative, with outlook remaining negative: Knights of Columbus, New York Life, Northwestern Mutual, TIAA and USAA.

Five U.S. life insurers had their ratings affirmed and outlooks revised to negative:  Assured Guaranty, Berkshire Hathaway, Guardian, MassMutual and Western & Southern.

S&P’s view of these companies’ fundamental credit characteristics has not changed. The actions follow as a result of the downgrade of the U.S. sovereign credit rating on Friday from AAA to AA+ with negative outlook. Additional insurance company credit rating downgrades could follow. We applaud the actions of S&P simply on the basis that it would be a disservice to consumers and users of S&P credit information for S&P to continue to send the message that all is rosy in financial world.

 

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