UBS Group AG’s chairman warned against looming risks in the US insurance industry, citing weak and complex regulations amid an unprecedented boom in private financing.
“We’re beginning to see huge rating agency arbitrage in the insurance business,” Chairman Colm Kelleher told his fellow financiers at Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit on Tuesday. “In 2007, subprime was all about rating agency arbitrage. What you see now is a massive growth in small rating agencies ticking the box for compliance of investment,” he said.
