S&P’s SEES TROUBLE AHEAD

U.S. commercial-lines insurers are plagued by inadequate reserves, according to Standard & Poor’s just-published outlook for 2003, and bullish pricing cannot simply sweep the problem away. S&P’s outlook on the sector remains negative. Of the U.S. commercial lines insurers interactively rated by S&P’s, about 40 percent have a negative outlook or CreditWatch, while only three percent have positive outlooks. The ratings agency said improved pricing conditions would have to prevail through 2004 to provide a floor for ratings. Entitled ‘U.S. Commercial Lines Insurance Outlook 2003: a Study in Paradox’, the report is available to RatingsDirect subscribers at http://www.ratingsdirect.com.