Insurers safe from ratings downgrade after floods, says S&P

The extensive flooding that has hit the UK in recent weeks is unlikely to lead to a ratings downgrade for non-life insurers, according to Standard & Poor’s

The ratings agency's London office said on Friday that flood events tend to be viewed as earnings events rather than capital events.

'Even if political pressure were to hinder insurers from recovering the full extent of their flood losses through raising premiums, we would not expect it to change our assessment of the UK non-life sector's industry and country risk,' S&P said.

Estimates of industry-wide losses have so far ranged from £500m to £1.2bn. The high-end of these losses would equate to a 4% increase in the combined (loss and expense) ratio, the ratings agency said.