View more on these topics

Fitch downgrades Old Mutual

Fitch has downgraded Old Mutual due to fears it may have to pump capital into its US life business.

Fitch downgraded Old Mutual’s long-term issuer default rating to BBB+ from A-the insurer financial strength ratings of its UK and Sweden-based insurance company subsidiaries to A from A+ and its US based subsidiaries to BBB- from BBB.

The agency says its downgrades relate concerns over US Life operations and the potential impact on the group as well as fears over the weakening operating environment of Old Mutual’s South African business.

Fitch expects that Old Mutual may need to inject additional capital into the US Life domestic operations in 2009 to maintain regulatory risk-based capital above 300 per cent.

The agency says the amount of capital contribution will depend on the credit environment and the potential for further investment impairments during the remainder of the year, which could be significant.

Recommended

Asia’s time has come

Asian markets stand at an interesting point after the ravages of 2008, with the much vaunted decoupling theory in tatters. Many commentators suggested the region had shed its long-term reliance on the US, driven by massive growth in countries such as China and India. But after a strong 2007, these markets were significantly down last year, with China off by almost two-thirds over the period.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com