Sovereign debt crisis puts U.S. insurers’ risk profiles on shaky grounds

Continuing economic weakness in certain European countries and the debt crisis in the United States has elevated the risk profile of U.S. insurers, reported A.M. Best Co.In a release, A.M. Best said that while it does not employ a “sovereign ceiling,” sovereign debt downgrades are a factor taken into consideration when assessing the financial strength of an insurer. “The agreement between the [U.S.] Congress and the Obama administration to increase the U.S. debt ceiling averted a default by the U.S. government, but the deal falls short of erasing all uncertainty as to the credit quality of U.S. sovereign debt,” the release says.