Moody's Investors Service Inc. said Tuesday it may reduce the ratings of many insurance and reinsurance firms due to losses incurred by their policyholders as a result of the recent terrorist attacks in the United States.
"While the losses reported to date by rated insurers do not pose a threat to solvency, the magnitude of expected claims is significant and has not generally been factored into existing ratings," the U.S. credit-rating agency said in a press release.
In examining the ratings of such insurance titans as Lloyd's Syndicate and Zurich Insurance Co., the agency said it will consider various factors, including the magnitude of actual losses reported relative to capitalization, "the degree of uncertainty surrounding current estimates of loss," and the extent to which the profile of risk within the insurance industry has changed since the Sept. 11 attacks in New York and Washington.
"In the current situation, it is possible that the relevant uncertainties will take a long time to become resolved. However, the range of uncertainty will probably be materially reduced over the next few months," Moody's said. "Moody's expects to conclude its reviews in this time frame."