XL parent XLIT outlook downgraded by S&P

S&P Global Ratings said on Oct. 12 that it revised the outlook for XLIT, formerly known as XL Group and now a subsidiary of it, to stable from positive.

The move affects Cayman Islands-based XLIT and its insurance and reinsurance subsidiaries, collectively called XL.

The outlook revision reflects S&P’s view that risk-adjusted capitalization will decline to the 'AA' ratings level as a result of recent catastrophe losses. More importantly, S&P now views this level as better aligned with the company's long-term capital management. The agency’s revised view is the primary driver of it revising the assessment of capital and earnings to very strong from extremely strong. The previous outlook also considered the continued successful integration of XL Catlin and expected improved operating performance. While the integration has been successful, the overall operating performance improvement has not materialized to the extent expected and we now view this potential improvement over a longer time horizon, according to the analysts.

At the same time as it reduced the outlook, S&P affirmed the 'A-' issuer credit rating on XLIT and its 'A+' financial strength and counterparty credit ratings on the company's core operating subsidiaries.

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