S&P Global Ratings has placed its long-term issuer credit ratings on 15 non-operating holding companies (NOHCs) of Bermuda-based reinsurers and insurers on CreditWatch with negative implications.
The credit rating agency has also placed the issue ratings on the securities issued or guaranteed by these NOHCs, on CreditWatch with negative implications.
Among the entities on CreditWatch negative are Arch Capital Group Ltd.; Ascot Group Ltd.; Aspen Insurance Holdings Ltd., Highlands Holdings Bond Co-Issuer Inc., and Highlands Holdings Bond Issuer Ltd.; and AXIS Capital Holdings Ltd.
These also include the Enstar Group Ltd.; Everest Group Ltd. and Everest Reinsurance Holdings Inc.; Fidelis Insurance Holdings Ltd.; Hiscox Ltd.; Lancashire Holdings Ltd.; RenaissanceRe Holdings Ltd. and DaVinciRe Holdings Ltd.; and SiriusPoint Ltd.
“The CreditWatch placement reflects the potential reassessment of our base-case assumptions on regulatory restrictions to payments from Bermuda-based re/insurance operating entities to NOHCs. We will review the enforcement of regulatory rules in Bermuda that could limit or restrict cash flow movements from the operating entity to the NOHC,” S&P explained.
Adding: “We generally rate NOHCs of insurance groups two notches below their core operating subsidiaries if potential restrictions to payments are low and three notches if high.
“If, in our view, the enforcement of regulatory rules results in a higher likelihood of restrictions on the upstreaming of cash flow, then we will likely lower the ratings on the NOHCs, and the ratings on the instruments issued or guaranteed by these NOHCs, by one notch.”
Alternatively, S&P noted, it may affirm the ratings on these NOHCs if we determine potential restrictions to payments in Bermuda are low, or if it determines such restrictions are high but on a case-by-case basis view that there are potential mitigants that may warrant a narrower notching.
The ratings on the operating re/insurance entities owned by these NOHCs are not affected by any rating actions on the NOHCs.
