View more on these topics

S&P’s downgrades Aegon and Aviva

Standard & Poor’s has downgraded Aegon and Aviva, citing concerns over exposure to financial markets.

Aegon Netherlands’ long and short-term counterparty credit ratings have dropped to ‘A-/A-2’ from ‘A+/A-1’. While the long-term counterparty credit and insurer financial strength ratings on Aegon’s core insurance operating subsidiaries have been lowered to ‘AA-‘ from ‘AA’. The outlook is negative.

Credit analyst Mark Button says: “The downgrade of the operating company reflects the higher-than expected investment-related losses in 2008, the continued weakness in financial markets in 2009 and our opinion that certain de-risking and capital preservation actions will reduce future underlying earnings.”

Standard & Poor’s believe the pressures are most acute in Aegon’s US business where the group has high equity and credit risk exposures. It says the deteriorating outlook for credit risk, combined with continued weakness and volatility in equity markets, is likely to constrain the near-term dividend capacity of Aegon’s primary business unit in the US, resulting in lower holding company cash inflows.

Button adds: “The negative outlook reflects our view of the risk that Aegon may fail to meet our expectations owing to the sensitivity of its business to investment markets during a period of heightened risk and volatility.”

Meanwhile, Standard & Poor’s lowered the long-term counterparty credit rating on Aviva PLC to ‘A’ from ‘A+’ although the ‘AA-‘ long-term counterparty credit and insurer financial strength ratings on Aviva’s core insurance operating subsidiaries was maintained with a negative outlook.

Credit analyst Charis Adu-Kwapong says: “The rating actions reflect our view that current challenging operating and financial market conditions have put pressure on certain key credit fundamentals of Aviva’s business. These include reduced cash flows from subsidiaries, increased double leverage, and a holding company debt structure benefiting only from limited upstream guarantees.”


Get disengaged

The End is Nigh. Judging by some of the conversations we have been having with practitioners over the past few weeks, the perfect storm of the crunch, recession and changes due to the retail distribution implementation programme is hitting home hard.

TSC MPs call for Lord Myners to go

MPs in the Treasury Select Committee have reportedly called for embattled City Minister Lord Myners to resign after new evidence was submitted about Sir Fred Goodwin’s pension.

Directors, limited liability partners and auto-enrolment

By Jim Grant, Senior Product Insight & Technical Support Analyst 6 April 2016 brought in changes to employer duties for directors and partners in limited liability partnerships. Here we explain exactly what’s changed. Before 6 April 2016… Directors of limited liability companies where there were no other directors or employees were exempt from the employer […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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