Stan­dard & Poors Rat­ing Agency has placed Sagi­cor Life and Sagi­cor Fi­nance on Cred­it­Watch with neg­a­tive im­pli­ca­tions be­cause of the in­abil­i­ty of the Bar­ba­dos-based in­sur­er Sagi­cor to re­duce its prop­er­ty and ca­su­al­ty busi­ness by sell­ing its U.K.-based sub­sidiary, Sagi­cor at Lloyd's.

The rat­ing agency has sig­nalled that it would be pre­pared to down­grade the fi­nan­cial in­sti­tu­tion if it does not sell Sagi­cor at Lloyds with­in three months.

In as­sess­ing Sagi­cor Life as 'BB+' Sagi­cor Fi­nance as 'BB' rat­ing (Cred­it­Watch with neg­a­tive im­pli­ca­tions), Stan­dard & Poors said: "If Sagi­cor com­pletes the sale in the fol­low­ing three months, we could af­firm the rat­ings on the com­pa­ny. We would down­grade Sagi­cor if it fails to do so."

Fol­low­ing is the state­ment from Stan­dard & Poors:

"On June 13, 2013, Stan­dard & Poor's Rat­ings Ser­vices placed its 'BB+' fi­nan­cial strength and coun­ter­par­ty cred­it rat­ings on Sagi­cor Life Inc. and its 'BB' rat­ing on Sagi­cor Fi­nance Ltd.'s $150 mil­lion, 10-year se­nior un­se­cured notes on Cred­it­Watch with neg­a­tive im­pli­ca­tions.

"Our rat­ings in­cor­po­rate our ex­pec­ta­tions that Sagi­cor will be able to sig­nif­i­cant­ly re­duce its prop­er­ty and ca­su­al­ty (P&C) busi­ness. So far, the com­pa­ny failed to sell Sagi­cor at Lloyd's, which spe­cial­izes in P&C, but the com­pa­ny is still pur­su­ing the sale.

"We would down­grade the com­pa­ny if the sale doesn't ma­te­ri­al­ize over the next three months. Based on our analy­sis, if the sale is not com­plet­ed with­in that pe­ri­od, our cap­i­tal ad­e­qua­cy cal­cu­la­tions will erode and the com­pa­ny's bot­tom-line re­sults will con­tin­ue to suf­fer loss­es in this busi­ness.

"If the sale is com­plet­ed, our cap­i­tal cal­cu­la­tions and op­er­at­ing per­for­mance should re­main in line with our ex­pec­ta­tions, and we could af­firm the rat­ing. How­ev­er, due to the com­pa­ny's large ex­po­sure to Ja­maica (CCC+/Sta­ble/C), which re­cent­ly re­struc­tured its debt amid a stalled econ­o­my, the out­look will most like­ly re­main neg­a­tive.

"We ex­pect to re­solve the Cred­it­Watch on Sagi­cor with­in the next three months. We could down­grade the com­pa­ny if it fails to for­mal­ize the sale dur­ing this time­frame. On the oth­er hand, if this trans­ac­tion is com­plet­ed we could af­firm the rat­ings."

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