Moody’s anticipates slow down in share buybacks

North America

Rating agency Moody’s expects the current level of share buyback activity among US property and casualty insurers to slow in the near term, given the current credit market turmoil. Moody’s analyst, Enrico Leo said that it did not expect share-buyback activity alone to lead to downward rating pressure on insurers, provided that buybacks do not exceed one years’ net income and do not significantly drain the operating entities of the company of working capital. Mr Leo said that share repurchase programs already announced by US p&c insurers were factored into the current ratings. He was also confident these programs could be scaled back in the event of a catastrophe loss or other unexpected events such as asset write-downs or reserve charges.