Rating agencies - Industry welcomes S&P capital model changes


Under pressure from industry, rating agency Standard & Poor's (S&P) has made more explicit the diversification benefits that it uses in its capital model. At the end of last year, S&P proposed a comprehensive update of the model that it uses to analyse portfolios of capital held by insurance companies, but diversification benefits remained implicit in the charges that the rating agency uses. Extensive consultation with industry revealed that firms were not so happy with this way of doing thi