Oil spill likely won’t affect ratings, capital positions: S&P’s

Losses resulting from the Gulf oil spill will likely be contained within 2010 Q2 results and not affect ratings, suggests Standard & Poor’s (S&P’s).In its report, Despite Significant Environmental Damage, The Gulf Oil Spill Losses to Re/Insurers are Expected to be Limited, S&P’s says the re/insurance industry’s early loss estimates from this event range from $1 billion to $3.5 billion.Although losses will be spread among multiple re/insurers in the London, Bermuda and U.S. markets, Lloyd’s of London is expected to bear a sizeable portion for both property and liability, the report continues.”Some of the early disclosures include only the property losses, as the liability portion is difficult to estimate at this point,” it says. “Nevertheless, we expect losses from this event – with the possible exception of a few outliers – to affect earnings rather than capital.”Based on these early estimates alone, S&P’s does not anticipate changing any ratings as a result of the spill.