Prudential Put on Credit Watch
NEWARK, N.J. — Moody’s Investors Service announced Friday that it had placed Prudential Insurance Co. of America and its subsidiaries on credit watch because of losses from Hurricane Andrew.
Moody’s became the third rating house in three days to downgrade some portion of Prudential.
A.M. Best Co. placed Prudential Property & Casualty Insurance Co. on its watch list Thursday.
On Wednesday, Standard & Poor’s clamped a credit watch on the claims-paying ability of Prudential and a group of property and casualty subsidiaries, just after the insurer reported that its losses from the devastating hurricane would exceed $1 billion, four times the original estimate.
Being placed on credit watch is sometimes the first step toward a downgrade in ratings. For property and casualty insurers, a downgrade could increase the interest they are charged when borrowing money.
Moody’s has downgraded Prudential’s credit rating once already from AAA, the highest rating, to AA.
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