Standard and Poor’s have downgraded ING Life Insurance, after a restructure of the company. ING’s financial strength and counterparty credit ratings were lowered to BBB+ from A-. The outlook is developing.
The rating follows the insurers “revised restructuring plans”, specifically the fact that the Asian and European operations of the business are likely to be divested separately.
ING group announced last Wednesday (January 12) that it was revising the base case for two IPOs relating to the divestment of its insurance and investment management operation – one for the U.S. business and the other for the European and Asian businesses.
The revision was due to an uncertain economic outlook and turbulent financial markets, especially in Europe.
According to the announcement, the ING group will continue to prepare a standalone future for its European insurance and investment management businesses, including an IPO, while “exploring other options” for its Asian insurance and investment management businesses.
Under Standard and Poor’s ratings methodology, the insurance operations of ING are seen as “strategically not important” to the group. The ratings agency said this situation was worsened for the Japanese operation with the restructuring of the group, and that they, “currently see uncertainty for ING Life Japan’s future due to the group’s revised restructuring plans.”
“In our view, there is a lack of clarity on the extent of negative impact on ING Life Japan’s future competitive position and financial profile, especially capital and financial flexibility, following the group’s revised plans,” the agency said in a statement.
