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Special Report

Impact investing

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How S&P’s ratings work

An insurer rated ‘BBB’ or higher is regarded as having financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments.
AAA An insurer rated ‘AAA’ has EXTREMELY STRONG financial security risks. ‘AAA’ is the highest insurer financial strength rating assigned by Standard & Poor’s.
AA An insurer rated as ‘AA’ has VERY STRONG financial security characteristics, differing only slightly from those rated higher.
A An insurer rated ‘A’ has STRONG financial security characteristics, but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings.
BBB An insurer rated ‘BBB’ has GOOD financial security characteristics, but is more likely to be affected by adverse business conditions than are higher rated insurers.
An insurer rated ‘BB’ or lower is regarded as having vulnerable characteristics that may outweigh its strengths. ‘BB’ indicates the least degree of vulnerability within the range; ‘CC’ the highest.
BB An insurer rated ‘BB’ has MARGINAL financial security characteristics. Positive attributes exist, but adverse business conditions could lead to insufficient ability to meet financial commitments.
B An insurer rated ‘B’ has WEAK financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments.
CCC An insurer rated ‘CCC’ has VERY WEAK financial security characteristics, and is dependent on favourable business conditions to meet financial commitments.
CC An insurer rated ‘CC’ has EXTREMELY WEAK financial security characteristics and is likely not to meet some of its financial commitments.
R An insurer rated ‘R’ has experienced a REGULATORY ACTION regarding solvency. The rating does not apply to insurers subject only to non-financial actions such as market conduct violations.
NR An insurer designated ‘NR’ is NOT RATED, which implies no opinion about the insurer’s financial security.
Plus (+) or minus (–) signs following ratings from ‘AA’ to ‘CCC’ show relative standing within the major rating categories.
‘pi’ Ratings, denoted with a ‘pi’ subscript, are insurer financial strength ratings based on an analysis of published financial information and additional information in the public domain. They do not reflect in depth meetings with an insurers management and are therefore based on less comprehensive information than ratings without a ‘pi’ subscript. ‘pi’ ratings are reviewed annually based on a new year’s financial statements, but may be reviewed on an interim basis if a major event that may affect an insurer’s financial security occurs. ‘pi’ ratings are not modified with a ‘+’ or ‘–‘ designations, nor are they subject to potential CreditWatch listings.

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