Scandinavian Re, the reinsurance unit of Sirius International, the insurance subsidiary of the global electrical engineering giant ABB, announced that it will cease writing new business, and will also stop writing renewals in the wake of substantial losses and recent ratings downgrades.
S&P recently downgraded the credit ratings on Sirius (See IJ website Feb. 15), and Moody’s Investors Service, and A.M. Best have done the same. Scan Re lost over $90 million last year, but there are additional concerns that, as the reinsurer of ABB, it may have substantial asbestos claims. ABB recently announced a loss of $691 million for 2001, due in large part to the $470 charge it took to double the size of its reserves to cover potential future claims.
As Scan Re was the most important of Sirius’ operations, its withdrawal from the market raises questions about the company’s position within the ABB group.
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