S&P Realigns US Insurance Groups Along Customer Lines

Standard and Poor’s is making changes to the way it evaluates the financial strength of insurance companies.

At the company’s annual Financial Services Seminar in Las Vegas, Steve Dreyer, the newly appointed managing director of S&P’s U.S. Insurance Ratings unit, announced that the changes will concentrate through a high-focus unit on the special needs of Standard & Poor’s most complex insurer customers.

The Insurance group continues to be part of Standard & Poor’s Financial Services business unit.

“Ten years ago, our analysis centered around rating insurers based on balance sheet strength,” said Dreyer. “Today, some of the world’s most sophisticated insurers turn to Standard & Poor’s for a priori evaluations of alternative business strategies, detailed competitive analyses, and assessments of capital requirements for highly specialized business lines. The new organization will enable us to react more quickly to changes in the insurance and financial markets and respond more effectively to the needs of our customers.”

The high-focus unit, headed by Director Jay Dhru, will consist of Standard & Poor’s most experienced insurance analysts, who will follow organizations such as AIG, Hartford, ACE, and John Hancock. Dhru continues to head Standard & Poor’s insurance capital markets unit.

The reorganization also creates a “segment analytic” unit that will develop Standard & Poor’s analysis in key insurance markets such as reinsurance, health care, workers compensation and annuities. Don Watson, formerly head of Standard & Poor’s reinsurance analysis team, will head the segment analytic unit, which will be responsible for about 125 insurance organizations that comprise the middle market.

The newly formed “research” unit, headed by director Bob Partridge, formerly head of the property/casualty analysis team, will analyze other midsize and smaller insurers, as well as HMOs and health plans, Standard & Poor’s said.