S&P lowered its long-term counterparty credit and insurer financial strength ratings on U.K.-based insurer International Insurance Co. of Hannover Ltd. to “A+” from “AA-.” The outlook is negative.
The downgrade reflects that S&P now considers Inter Hannover to be strategically important, but no longer core, to its parent, Hannover Ruckversicherungs AG. Inter Hannover’s core status was predicated on its role as a “virtual branch” of Hannover Re, fronting a significant volume of direct business on Hannover Re’s behalf within both the London Market and the aviation sector. Program business is agency-led and is largely retained by Inter Hannover for its own account. It was introduced to the company in 1999.
The negative outlook on Inter Hannover reflects the negative outlook on the parent, Hannover Re, and is driven by S&P’s concerns about the group’s quality of capital and material exposure to reinsurance credit and timing risks.
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