Standard & Poor’s cut its ratings on a slew of life insurers, including Hartford Financial Services Group and MetLife Inc., after it increased its loss assumptions for certain securities in relation to the insurers’ capital adequacy, according to Reuters.
The downgrades also reflect “severe equity market declines and volatility on earnings and capital adequacy,” S&P said in a statement, Reuters reported. “We expect that the effect of these factors will challenge life companies’ competitive strengths and ability to generate profitable business.”
S&P cut Metlife one notch to “A-minus,” the seventh highest investment grade, and cut its insurance unit one step to “AA-minus,” the fourth highest investment grade.
The Hartford was also cut one step to “BBB-plus,” the third lowest investment grade, while its insurance arm was cut one notch to “A-plus,” the fifth highest investment grade. Both of these units remain on review for further downgrade.
Lincoln National Corp., another insurer with major operations in Hartford, was also cut, Reuters said.
At 11 a.m., The Hartford traded at $6.06, down $1.10, or 15.4 percent. MetLife traded at $19.01, down $4.98, or 20.8 percent. Lincoln traded at $8.92, down $1.83, or 17 percent.
