S&P ERM Criteria to be Released Soon

A recent article in Treasury & Risk Magazine discusses the incorporation of ERM reviews in credit ratings by Standard & Poors.  These reviews have been a part of ratings reviews in the financial services industry, but now are being extended to non-financial companies.  Criteria for these reviews will be released soon as discussed in the excerpt below.

“Most companies these days recognize the value of risk management,” says Dale Hall, vice president and chief actuary at Bloomington, Ill., insurer Country Financial. But he says for a lot of them, it’s still mostly in the “should do” category.  Steve Dreyer, an S&P managing director who heads the ERM global integration project, says, “This is something we’re doing very deliberately and carefully.”

The plan is not for some kind of “big bang,” Dreyer says. Rather, S&P’s analysts, in the normal process of their reviews, are talking with corporate managers about risk management and developing criteria and a methodology, which will be published before ERM ratings are actually offered. “We’re getting the lay of the land,” he says. The target date for publishing the criteria to be used for risk management ratings is the third quarter of 2009.

Is your company prepared for these reviews?  If not, Wheelhouse Advisors can help.  To learn more, visit www.WheelhouseAdvisors.com.