Defaults And Downgrades Rise But Remain Historically Low

In 2023, eight financial services entities that were rated by S&P Global Ratings at the start of the year defaulted, up from six in 2022. All eight were publicly rated. Because of the rise in defaults, the global financial services default rate rose slightly to 0.39% in 2023 from 0.28% in 2022; the 2023 default rate was comparable to the 2011 level of 0.4%, when there was a similar number of defaults. Still, the default rate for financial services remains below its long-term average.

Of the eight financial services entities that were rated at the start of 2023 and defaulted over the course of the year, six were at the lower end of speculative grade, reflecting the general trend that most entities that default are rated below 'CCC+' when they default. Very infrequently, an entity with an investment-grade rating will default--this accounted for less than 3.6% of all financial services defaults between 1981 and 2023.

Half of the financial services defaults in 2023 involved entities that were rated below 'CCC+' when they defaulted. One issuer was not rated at the time of default, and two issuers were rated 'B-'. Silicon Valley Bank was rated 'BBB' immediately prior to default.

One year before their defaults, six of the eight entities had ratings of 'B' or below; only Silicon Valley Bank and its parent, SVB Financial Group, were rated investment grade. These were the first investment-grade defaults in financial services since 2016 and the first in our universe of corporate ratings since 2019.

Five of the eight entities were from the U.S., one was from Mexico, one was from Luxembourg, and one was from Azerbaijan. As was the case in 2022, most of the defaults involved nonbank financial institutions (NBFIs) and weaknesses specific to these financial institutions. Five of the eight defaulted entities in 2023 were NBFIs; the rest were banks.

Half of the defaults in 2023 were due to distressed exchanges, while half of the defaults in 2022 were due to missed interest or principal payments. Weaker borrowers were less favorably positioned to absorb higher borrowing costs--these entities, through distressed exchanges, exchanged part of their capital structures to improve their liability structures or their liquidity by offering creditors less than what was originally promised.

Out of the rest of last year's defaults, two were due to regulatory directives (the defaults of Silicon Valley Bank and Muganbank OJSC), one was due to missed payments, and one was due to Chapter 11 bankruptcy.

Despite an increase in financial services defaults, credit quality remained balanced, while an increase in upgrades slightly outpaced downgrades in 2023 compared with 2022 levels. This caused the ratio of downgrades to upgrades to fall to 0.59x in 2023 from 0.62x the previous year. The ratio remains below the average of 1.92x and the maximum of 8.53x seen during the 1981-2023 period.

We have identified a clear negative correspondence between ratings and defaults: the higher the issuer credit rating, the lower the observed default frequency. This indicates that credit ratings remain effective indicators of relative credit risk for financial services issuers.

We show the relationship between ratings and defaults with the Gini ratio, which is a measure of the rank-ordering power of ratings over a given time horizon (see table 1). This measure shows the ratio of actual rank-ordering performance to theoretically perfect rank ordering.

In 2023, two financial services issuers defaulted after being rated in the 'BBB' rating category one year before. This brought the one-year financial services Gini ratio to 78.4% in 2023, down from 87% in 2022; it's also below the long-term weighted average of 80.15% (see chart 2). If not for the investment-grade defaults, the Gini ratio in 2023 would have been much higher.

The three-year Gini ratio fell to 78.5% in 2023 from 83.9%, the five-year Gini ratio fell to 84.6% from 88.0%, and the seven-year Gini ratio fell to 86.7% from 89.5%. These weighted-average Gini ratios are weighted by yearly issuer counts since 1981 (see Appendix III for details).

By comparing financial and nonfinancial annual average Gini coefficients from 1981 to 2023, we see that the rank ordering of defaults and ratings in both sectors declined over that time frame, with a weighted-average Gini ratio for financials of 80.15% over one year, compared with 59.38% over seven years (see table 1). This trend is expected, since longer time horizons allow for more credit deterioration from higher rating levels.

Table 1

Gini coefficients for financial and nonfinancial issuer ratings, 1981-2023
		--Time horizon--
		One-year	Three-year	Five-year	Seven-year
Financials	Weighted average	80.15	70.31	63.79	59.38
	Average	83.56	77.13	70.26	64.76
	Standard deviation	(19.48)	(14.55)	(16.79)	(17.26)
Nonfinancials	Weighted average	80.62	72.13	68.54	66.14
	Average	84.49	76.70	72.51	69.60
	Standard deviation	(5.93)	(5.12)	(5.25)	(4.95)
The numbers in parentheses are standard deviations. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Default Observations In 2023

• The speculative-grade default rate for financial services rose to 1.3% in 2023 from 1.1% in 2022 as more speculative-grade issuers defaulted.
• There were eight defaults in total. Four of the eight entities that defaulted in 2023 were rated 'CCC' or below just prior to default, two were rated 'B-', one was rated 'BBB', and one was not rated. A year before default, most of the issuers were rated deep in speculative grade, below 'B-'.
• Among the entities that defaulted in 2023, the average time to default was 12.22 years from the initial rating, close to the average of 12 years for the issuers that defaulted in 2022 and versus 6.4 years for the issuers that defaulted in 1981-2023.
• However, 2023 was also the first year since 2016 with investment-grade defaulters--U.S.-based Silicon Valley Bank and its nonoperating holding company, SVB Financial Group. They were rated in the 'BBB' category at the beginning of the year.

Table 2

Global financial services default summary
	Total defaults (no.)*	Rated defaults (no.)	Investment-grade defaults (no.)	Speculative-grade defaults (no.)	Default rate (%)	Investment-grade default rate (%)	Speculative-grade default rate (%)
1981	0	0	0	0	0.00	0.0	0.0
1982	2	2	0	2	1.61	0.0	12.5
1983	2	2	1	1	1.27	0.7	5.3
1984	0	0	0	0	0.00	0.0	0.0
1985	1	1	0	1	0.45	0.0	3.4
1986	1	0	0	0	0.00	0.0	0.0
1987	0	0	0	0	0.00	0.0	0.0
1988	6	5	0	5	1.12	0.0	7.6
1989	10	10	3	7	1.98	0.7	11.1
1990	5	4	0	4	0.72	0.0	6.9
1991	10	10	0	10	1.68	0.0	13.9
1992	11	9	0	9	1.37	0.0	13.0
1993	2	2	0	2	0.28	0.0	3.4
1994	1	1	1	0	0.13	0.1	0.0
1995	4	4	0	4	0.43	0.0	6.7
1996	1	0	0	0	0.00	0.0	0.0
1997	3	3	2	1	0.27	0.2	1.5
1998	11	11	1	10	0.84	0.1	9.3
1999	7	6	4	2	0.45	0.3	1.5
2000	12	10	3	7	0.71	0.2	3.7
2001	23	13	2	11	0.90	0.2	5.6
2002	14	9	1	8	0.60	0.1	3.7
2003	8	6	1	5	0.39	0.1	1.9
2004	6	4	1	3	0.25	0.1	1.1
2005	2	1	0	1	0.06	0.0	0.35
2006	2	2	0	2	0.11	0.0	0.68
2007	3	3	0	3	0.16	0.0	0.97
2008	26	21	13	8	1.06	0.8	2.45
2009	33	28	9	19	1.38	0.5	5.69
2010	17	13	0	13	0.66	0.0	3.76
2011	8	8	1	7	0.40	0.1	1.93
2012	8	5	0	5	0.25	0.0	1.30
2013	4	3	0	3	0.15	0.0	0.68
2014	6	3	0	3	0.14	0.0	0.60
2015	15	12	0	12	0.56	0.0	2.29
2016	16	16	1	15	0.73	0.1	2.67
2017	7	7	0	7	0.32	0.0	1.25
2018	9	6	0	6	0.28	0.0	1.09
2019	10	9	0	9	0.42	0.0	1.65
2020	5	5	0	5	0.23	0.0	0.93
2021	4	3	0	3	0.14	0.0	0.57
2022	6	6	0	6	0.28	0.0	1.15
2023	8	8	2	6	0.39	0.1	1.28
Includes the bank, nonbank financial institution, and insurance sectors. *Total defaults include companies that were no longer rated one year before default. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 3

Global rated financial services defaults in 2023
Company	Reason for default	Country/ market	Sector	Amount of debt outstanding (mil. US$)	Default date	Rating one year before default	Rating three years before default	First rating	Date of first rating
Mexarrend S.A.P.I. de C.V.	Missed principal	Mexico	NBFI	300	01/20/23	B	BB-	B+	11/04/10
Altisource Portfolio Solutions S.A.	Distressed exchange	Luxembourg	NBFI	0	02/22/23	CCC+	B	B+	11/05/12
Silicon Valley Bank	Regulatory directive	U.S.	Bank	0	03/10/23	BBB+	BBB+	BBB	12/08/03
SVB Financial Group	Chapter 11	U.S.	Bank	3,300	03/17/23	BBB	BBB	BBB-	12/08/03
Curo Group Holdings Corp.	Distressed exchange	U.S.	NBFI	318	05/18/23	B-	B-	B	02/19/13
CNG Holdings Inc.	Distressed exchange	U.S.	NBFI	310	08/16/23	CCC+	B	CCC	08/09/16
Muganbank OJSC	Regulatory directive	Azerbaijan	Bank	0	10/25/23	B-	CCC+	CCC+	04/06/10
TortoiseEcofin Parent Holdco LLC	Distressed exchange	U.S.	NBFI	318	11/01/23	CCC+	B	BB-	11/10/17
Excludes defaults of confidentially rated entities. NBFI--Nonbank financial institution. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Financial services issuers tend to see fewer defaults than nonfinancial corporate issuers (see chart 3). Defaults of banks and NBFIs can be procyclical since the sector reflects current macroeconomic conditions. For some financial services issuers, a loss of confidence from stakeholders (such as counterparties or funding sources) can contribute to a rapid decline in liquidity and credit quality. We saw this in 2023 with the sudden defaults of Silicon Valley Bank and SVB Financial Group: An unexpected repositioning of the bank's balance sheet sparked steep, sudden deposit outflows, and the resulting loss of confidence precipitated funding and liquidity stress. This is consistent with the more systemic experience during the 2008-2009 global financial crisis.

Still, defaults among financial services issuers continue to be much rarer than defaults among nonfinancial issuers. Financial services issuers saw more defaults in 2023 than 2022, like nonfinancial issuers. However, the 2023 financial services default rates by subsector (banks, NBFIs, and insurance) are still below their long-term averages.

In addition, financial services defaults accounted for only 5.22% of total corporate defaults in 2023. And while the financial services default rate was 0.39% last year, the default rate for nonfinancial corporate issuers was 6.3x higher, at 2.46%. Even during the worst period of the global financial crisis, the overall financial services default rate remained below 1.5%.

Nonetheless, the overall financial services default rate rose in 2023 and was above the default rates of the past three years. Five NBFIs and three banks defaulted, resulting in a 2023 NBFI default rate of 1.0% and a 2023 bank default rate of 0.38%. No rated insurance issuers defaulted in 2023, the same as in 2022 and 2021.

The following are the rated financial services entities at the start of 2023 that defaulted by year's end:

• Silicon Valley Bank and SVB Financial Group saw the U.S. Federal Deposit Insurance Corp. be appointed as receiver following a spike in customer deposit outflows. The situation was made worse by the bank's concentration in corporate deposits from investor-funded technology companies and by its unrealized loss position in its held-to-maturity securities portfolio.
• A Mexico-based NBFI, Mexarrend S.A.P.I. de C.V., failed to pay about 85 million Mexican pesos in principal and interest on short-term local market debt due Jan. 19, 2023.
• Luxembourg-based Altisource Portfolio Solutions S.A. completed a distressed exchange that extended the maturity of a senior secured term loan to April 2025, with the option to extend to April 2026.
• U.S.-based Curo Group Holdings Corp. completed a distressed exchange where it exchanged $682.3 million of senior secured notes with $682.3 million of senior 1.5-lien secured notes.
• U.S.-based CNG Holdings Inc. completed a distressed exchange where it exchanged $227 million of 12.5% senior secured notes due June 2024 with $209 million of 14.5% senior secured notes due June 2026.
• Muganbank's banking license was revoked by Azerbaijan's central bank on Oct. 19, 2023, because its aggregate capital was below the regulatory minimum, its capital adequacy ratio was below 3%, and it failed to operate in a reliable and prudent manner. It could not continue operating as a commercial bank or meet its financial obligations.
• U.S.-based TortoiseEcofin Parent Holdco LLC defaulted because of a distressed exchange.

Default rates for banks and for insurance companies in 2023 were below their long-term averages (which go back to 1981) as well as their 10-year averages (see table 4). The 10-year average default rates for banks and for insurance companies were 0.42% and 0.06%, respectively, while the rate for nonfinancial entities during that same period was 1.88%. The average default rate for insurance companies between 1981 and 2023 remains the lowest of any financial or nonfinancial sector.

NBFIs led defaults in 2023, with the default rate jumping to 1.0% from 0.58% in 2022. The 2023 default rate is above the 10-year average of 0.73% and close to the long-term average of 1.03%.

Table 4

Global annual default rates by sector (%)
	Bank	NBFI	Insurance	Nonfinancial
1981	0.00	0.00	0.00	0.16
1982	0.00	3.13	2.94	1.18
1983	0.00	0.00	4.76	0.71
1984	0.00	0.00	0.00	1.06
1985	0.00	0.00	1.49	1.23
1986	0.00	0.00	0.00	2.12
1987	0.00	0.00	0.00	1.17
1988	1.92	0.00	0.00	1.45
1989	1.77	7.84	0.58	1.71
1990	1.32	0.00	0.00	3.41
1991	2.22	0.00	1.35	3.84
1992	2.16	0.00	0.72	1.54
1993	0.29	0.00	0.32	0.74
1994	0.00	0.00	0.29	0.85
1995	0.23	1.89	0.26	1.34
1996	0.00	0.00	0.00	0.76
1997	0.00	1.36	0.22	0.81
1998	1.35	1.81	0.00	1.52
1999	0.17	0.63	0.66	2.84
2000	0.00	0.60	1.44	3.22
2001	0.90	3.45	0.16	4.90
2002	0.73	0.51	0.48	4.83
2003	0.00	1.39	0.48	2.58
2004	0.13	0.00	0.47	1.02
2005	0.00	0.45	0.00	0.85
2006	0.00	0.00	0.28	0.64
2007	0.00	1.14	0.00	0.47
2008	0.93	2.98	0.49	2.18
2009	1.38	3.80	0.47	5.72
2010	0.24	2.90	0.24	1.51
2011	0.12	1.22	0.36	1.01
2012	0.12	0.88	0.12	1.58
2013	0.24	0.29	0.00	1.46
2014	0.12	0.52	0.00	0.95
2015	1.23	0.00	0.12	1.72
2016	0.79	1.83	0.11	2.72
2017	0.23	0.85	0.12	1.62
2018	0.12	1.06	0.00	1.35
2019	0.46	0.84	0.12	1.69
2020	0.23	0.41	0.12	3.86
2021	0.24	0.20	0.00	1.16
2022	0.36	0.58	0.00	1.28
2023	0.38	1.00	0.00	2.46
Average	0.47	1.01	0.45	1.84
Weighted average	0.45	1.03	0.25	1.94
Median	0.23	0.52	0.12	1.46
Standard deviation	0.65	1.50	0.87	1.27
Minimum	0.00	0.00	0.00	0.16
Maximum	2.22	7.84	4.76	5.72
NBFI--Nonbank financial institution. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Financial Services Rating Trends In 2023

Ratings on financial services companies have become more stable, both over the past 10 years and relative to 2022. Only 16% of entities had a change in rating in 2023, compared with 24.6% in 2013 (see table 5).

Table 5

Summary of annual rating action trends for financial services companies (%)
	Issuers as of Jan. 1 (no.)	Upgrades	Downgrades*	Defaults	Withdrawn ratings	Changed ratings	Unchanged ratings	Downgrade-to-upgrade ratio
1981	121	10.74	10.74	0.00	2.48	23.97	76.03	1.00
1982	124	7.26	17.74	1.61	1.61	28.23	71.77	2.44
1983	157	5.10	11.46	1.27	4.46	22.29	77.71	2.25
1984	188	5.32	17.02	0.00	1.06	23.40	76.60	3.20
1985	222	6.76	6.76	0.45	2.70	16.67	83.33	1.00
1986	338	6.21	10.36	0.00	4.44	21.01	78.99	1.67
1987	394	6.35	14.21	0.00	2.79	23.35	76.65	2.24
1988	448	9.82	12.50	1.12	3.79	27.23	72.77	1.27
1989	506	6.52	10.28	1.98	2.57	21.34	78.66	1.58
1990	558	2.69	22.94	0.72	1.61	27.96	72.04	8.53
1991	595	3.19	22.86	1.68	2.86	30.59	69.41	7.16
1992	659	6.37	14.72	1.37	2.12	24.58	75.42	2.31
1993	722	9.56	8.45	0.28	3.46	21.75	78.25	0.88
1994	796	7.91	12.06	0.13	3.39	23.49	76.51	1.52
1995	927	6.47	13.16	0.43	2.48	22.55	77.45	2.03
1996	1,016	9.55	7.78	0.00	6.30	23.62	76.38	0.81
1997	1,131	7.34	6.10	0.27	7.16	20.87	79.13	0.83
1998	1,314	6.77	12.56	0.84	9.82	29.98	70.02	1.85
1999	1,343	6.55	9.16	0.45	7.89	24.05	75.95	1.40
2000	1,418	7.55	8.82	0.71	6.98	24.05	75.95	1.17
2001	1,448	4.35	12.15	0.90	7.67	25.07	74.93	2.79
2002	1,500	6.00	18.53	0.60	6.67	31.80	68.20	3.09
2003	1,551	6.64	11.54	0.39	6.25	24.82	75.18	1.74
2004	1,616	9.34	4.95	0.25	6.56	21.10	78.90	0.53
2005	1,671	16.70	4.85	0.06	6.64	28.25	71.75	0.29
2006	1,750	17.31	2.34	0.11	6.86	26.63	73.37	0.14
2007	1,875	18.03	4.75	0.16	6.03	28.96	71.04	0.26
2008	1,982	7.42	14.63	1.06	6.00	29.11	70.89	1.97
2009	2,034	3.39	20.35	1.38	9.00	34.12	65.88	6.00
2010	1,967	7.27	8.95	0.66	6.10	22.98	77.02	1.23
2011	1,978	11.17	17.39	0.40	6.83	35.79	64.21	1.56
2012	1,983	5.45	13.21	0.25	6.56	25.47	74.53	2.43
2013	2,018	9.66	9.12	0.15	5.70	24.63	75.37	0.94
2014	2,084	8.59	9.31	0.14	5.57	23.61	76.39	1.08
2015	2,157	6.35	11.68	0.56	5.70	24.29	75.71	1.84
2016	2,196	6.38	8.52	0.73	6.79	22.40	77.60	1.34
2017	2,190	8.17	7.72	0.32	7.90	24.11	75.89	0.94
2018	2,146	8.53	6.52	0.28	6.24	21.58	78.42	0.77
2019	2,155	7.84	3.06	0.42	5.29	16.61	83.39	0.39
2020	2,157	1.72	10.71	0.23	5.61	18.27	81.73	6.24
2021	2,141	6.91	3.55	0.14	5.28	15.88	84.12	0.51
2022	2,129	6.11	3.76	0.28	6.62	16.77	83.23	0.62
2023	2,058	7.19	4.23	0.39	4.18	15.99	84.01	0.59
Weighted average		7.91	9.65	0.47	6.06	24.09	75.91	1.71
Average		7.64	10.73	0.54	5.26	24.17	75.83	1.92
Median		6.91	10.36	0.39	5.70	23.97	76.03	1.40
Standard deviation		3.36	5.17	0.51	2.12	4.59	4.59	1.83
Minimum		1.72	2.34	0.00	1.06	15.88	64.21	0.14
Maximum		18.03	22.94	1.98	9.82	35.79	84.12	8.53
Includes the bank, nonbank financial institution, and insurance sectors. This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. *Excludes downgrades to 'D', which are shown separately in the "Defaults" column. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

In general, financial services entities have tended to see more downgrades than upgrades over the long term (1981-2023); in 29 of the 43 examined years, the downgrade-to-upgrade ratio was above 1.0x. But in recent years, the trend has reversed: Upgrades have generally outnumbered downgrades since 2017 (with the exception of 2020, when the downgrade-to-upgrade ratio was 6.2x).

The financial services downgrade rate inched higher to 4.2% in 2023 from 3.8% amid rising macroeconomic risks across regions and sectors. On top of that, since early 2022, borrowing costs climbed quickly as major central banks hiked policy rates in response to inflation. This strained issuers, particularly lower-rated ones. There was increasing credit divergence as deterioration became more acute for NBFIs and entities with weak funding profiles.

But upgrades outpaced downgrades last year, with the upgrade rate finishing 2023 at 7.19%, up from 6.11% in 2022. This led to a lower downgrade-to-upgrade ratio in 2023 (0.59x) compared with 2022 (0.62x).

Credit stability--which indicates the share of ratings that were unchanged over the course of the year--improved to 84.01% in 2023 from 83.23% in 2022. This metric has remained above 80% over the past five years after having fallen short of that level in the years before that going all the way back to 1986.

Persistent inflation, tighter financing conditions, and lower economic growth all affected the credit performance of rated financial institutions in 2023. Banks accounted for the largest share of financial services downgrades last year (49%), followed by NBFIs (29%) and insurance companies (22%); NBFIs led downgrades in 2023. The U.S. accounted for 40% of the downgrades, followed by the emerging and frontier markets (30%) and Europe (23%).

Banks

Banks were the largest of the three financial services subsectors in 2023, with 791 rated issuers at the start of the year. The stability rate slid in 2023 to 77.6% from 81.0%, primarily because of rating withdrawals. Half of the withdrawals involved speculative-grade banks strained by high borrowing costs or a difficult operating environment.

There was also an increase in the upgrade rate for banks in 2023 (to 12.3% from 7.7%) and an increase in the downgrade rate (to 5.4% from 3.3%). The default rate also edged higher, to 0.38% from 0.36% on the back of three defaults in 2023. (See Appendix I for detailed statistics by sector.)

Banks in the emerging and frontier markets accounted for 55% of the downgrades in 2023, followed by U.S. banks (22%) and European banks (21%).

Solid profitability as a result of higher net interest income helped banks in the developed markets absorb higher operating and credit costs. Banks in the emerging markets have largely benefited from higher interest rates, which are reflected in higher margins, but sluggish economic growth in the emerging markets affected credit expansion and might weaken asset quality. Potential further declines in deposits, funding cost pressures, unrealized losses, commercial real estate exposures, and economic uncertainty were the other key challenges for banks globally that we identified (see "Global Banks Outlook 2024: Forewarned Is Forearmed," published Nov. 15, 2023).

Insurance

Insurance was the second-largest financial services subsector, starting 2023 with 766 rated issuers. Insurance issuers saw their downgrade rate rise to 2.5% in 2023 from 1.6%. However, that rate is still relatively low compared with the downgrade rates of the other financial services subsectors. Insurance also tends to have the highest stability rate, with 91.1% of ratings unchanged in 2023 and a historical average of 79.4%.

Insurers are clearly exposed to macroeconomic and financial market pressures, but enhanced risk management practices have gained ground over the past decade--for example, a focus on asset and liability management, strategic asset allocation, and sector and obligor concentration limits. Those practices--combined with capital buffers and product redesign--have led to ratings stability, even in recent times of stress.

In 2023, U.S. issuers led downgrades in insurance segments such as property/casualty, life, and mutual insurance, as higher inflation weighed on underwriting results. Over time, strains have worsened in some of these segments as higher interest rates weakened balance sheets and our views of companies' capital adequacy.

NBFIs

NBFIs made up the smallest of the three financial services subsectors, with 501 rated issuers at the start of 2023. NBFIs saw their upgrade rate rise to 4.6% (from 3.7%) and their downgrade rate fall to 5.0% (from 7.8%). The default rate rose to 0.99% in 2023 from 0.58%.

In 2023, the U.S. led NBFI downgrades, accounting for 46%, followed by the emerging and frontier markets (36%).

NBFIs are vulnerable to disruptions in funding access given geopolitical tensions, slowing economies, and elevated interest rates. These entities tend to rely more on market funding, and they don't benefit from access to central bank credit lines. For them, tighter financing conditions may in some cases prove more challenging, even if many of them used the abundant market liquidity of past years to push out debt maturities.

Investment-Grade Issuers Dominate Among Financial Institutions

Financial services issuers accounted for 2,034 of the rated issuers globally at the start of 2023, while nonfinancial issuers accounted for 4,780 of the rated issuers. As of Jan. 1, 2023, 78% of financial services issuers were rated investment grade, compared with just 41% of nonfinancial issuers.

In 2023, more rated financial services issuers were rated in the 'A' category (40%) than in any other single rating category; that share was higher than it was in 2022 (39%) and higher than its 15-year average (roughly 38%). This was followed by issuers rated in the 'BBB' category (28%) and issuers rated in the 'BB' category (12%). The 'B' rating category accounted for 11% of rated entities, and entities rated 'CCC+' or below made up 1%. There were only three 'AAA' issuers--a number that has remained stable since 2018--but the number has gradually decreased from 113 in 1995.

Financial services entities rated by S&P Global Ratings--which include banks, NBFIs, and insurance companies--have maintained a median rating level of 'BBB+' since 2014 (for definitions, see Appendix I). This is despite increasing global pressures and uncertainty from rising geopolitical risks, tighter financing conditions, and, more recently, persistent inflation. The median rating for nonfinancial companies was speculative grade, at 'BB'.

The insurance sector had the highest median rating ('A') among the financial services sectors, while banks and NBFIs had median ratings of 'BBB+' and 'BBB', respectively. In the last 43 years, the sharpest decline in the median rating was for banks (from 'AA') followed by NBFIs (from 'A'). However, since 2016, the median rating has been stable for all of the financial services sectors.

The emerging and frontier markets account for 54.2% of speculative-grade financial services issuers, followed by the U.S. (29.2%), Europe (11.3%), and other developed markets (5.2%). One reason for this is that many financial services issuers in the emerging and frontier markets have weaker creditworthiness than better-positioned players in more-developed markets.

Lower sovereign credit ratings are another significant factor. Although sovereign ratings don't act as a ceiling on issuer credit ratings, an issuer rated higher than the sovereign must be able to withstand a sovereign default. For example, government-related entities are typically more subject to country risk and negative sovereign intervention risk than private-sector entities, since they usually have direct links to governments. Some issuers have explicit or implicit links to their respective sovereign or have an eligible guarantee from a parent or sovereign. In all cases, the issuer credit rating is subject to any sovereign-related considerations.

In the U.S., the number of speculative-grade financial services entities reflects the number of speculative-grade U.S. NBFIs that there are (39% of U.S. NBFIs are speculative grade). In the emerging and frontier markets, 53% of speculative-grade issuers are banks, and in other developed markets, 29% are NBFIs.

The Number Of Rated Financial Services Entities Grew Materially In The Past 43 Years

Since 1981, the number of rated financial services issuers has grown materially. In the 1980s and 1990s, the number of banks and insurance companies flourished; in the past 20 years, the number of financial services issuers grew by 22% primarily because of NBFIs and insurance companies.

Banks have adjusted to rising capital requirements and new regulatory requirements since the global financial crisis. Heightened regulatory requirements led to the closure of weaker banks and to market consolidation, contributing to a decline in the number of rated banks.

NBFIs, meanwhile, have shown continued growth as new nonbank lenders, finance companies, and business development companies have entered the market--the number of rated NBFIs has jumped 24% in the last 10 years. Over the same period, the number of rated banks has contracted 14%, and the number of rated insurance companies has shrunk 12% (see chart 8).

At the end of 2023, 34.3% of NBFIs were rated speculative grade, compared with 27% of banks and just 11.2% of insurers (see chart 9). NBFIs tend to be unregulated or more lightly regulated than banks, and they tend not to benefit from central bank access. As a result, they're generally rated lower than regulated banks and insurance companies.

The share of banks that are rated investment grade rose to 73.3% as of Dec. 31, 2023, from 68% at the end of 2017. Credit quality in the banking sector has continually improved in the past several years as banks have strengthened their balance sheets and expanded their bail-in-eligible capital reserves amid favorable economic trends (see chart 9).

Meanwhile, the number of investment-grade insurers has been strong--88%, on average, over the last 10 years, although it's been below 90% since 2014. Insurers are less exposed to confidence sensitivity than banks, but they're not immune to it.

Transition Rates And Ratings Performance For 2023

Our analysis of transition rates in 2023 suggests that ratings behavior remains consistent with long-term trends, with a negative correspondence between ratings and the observed frequency of default.

Investment-grade financial services issuers globally tend to exhibit greater ratings stability (as measured by the frequency of rating transitions) than their speculative-grade counterparts (see table 6). For instance, 97.14% of issuers rated 'A' at the beginning of 2023 were still rated 'A' on Dec. 31, 2023, whereas the comparable share for issuers rated 'B' was only 81.15%.

Table 6

One-year transition rates for financial services companies in 2023 by region (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
Global
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	95.65	1.93	0.00	0.00	0.00	0.00	0.00	2.42
A	0.00	0.25	97.14	0.62	0.00	0.00	0.00	0.00	1.99
BBB	0.00	0.00	2.26	92.52	0.17	0.35	0.00	0.35	4.35
BB	0.00	0.00	0.39	2.75	85.88	1.18	0.39	0.00	9.41
B	0.00	0.00	0.00	0.00	6.28	81.15	4.71	1.05	6.81
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	69.57	17.39	13.04
U.S. and tax havens
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	94.90	2.04	0.00	0.00	0.00	0.00	0.00	3.06
A	0.00	0.00	97.84	1.44	0.00	0.00	0.00	0.00	0.72
BBB	0.00	0.00	0.49	94.09	0.00	0.00	0.00	0.99	4.43
BB	0.00	0.00	0.00	2.90	84.06	4.35	0.00	0.00	8.70
B	0.00	0.00	0.00	0.00	2.94	82.35	2.94	1.47	10.29
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	33.33	66.67	0.00
Europe
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	93.55	3.23	0.00	0.00	0.00	0.00	0.00	3.23
A	0.00	0.76	95.44	0.38	0.00	0.00	0.00	0.00	3.42
BBB	0.00	0.00	6.93	86.14	0.00	0.00	0.00	0.00	6.93
BB	0.00	0.00	0.00	5.88	79.41	0.00	2.94	0.00	11.76
B	0.00	0.00	0.00	0.00	4.76	76.19	4.76	0.00	14.29
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	50.00	50.00
Emerging and frontier markets
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	98.44	0.00	0.00	0.00	0.00	0.00	1.56
BBB	0.00	0.00	2.26	95.93	0.00	0.90	0.00	0.00	0.90
BB	0.00	0.00	0.00	1.41	88.73	0.00	0.70	0.00	9.15
B	0.00	0.00	0.00	0.00	9.38	81.25	5.21	1.04	3.13
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	83.33	5.56	11.11
Other developed
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	97.79	0.00	0.00	0.00	0.00	0.00	2.21
BBB	0.00	0.00	0.00	85.19	1.85	0.00	0.00	0.00	12.96
BB	0.00	0.00	5.88	5.88	76.47	0.00	0.00	0.00	11.76
B	0.00	0.00	0.00	0.00	0.00	87.50	12.50	0.00	0.00
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Includes the bank, nonbank financial institution, and insurance sectors. N/A--Not applicable. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

No 'AAA' rated financial institutions were downgraded in 2023. However, the number of 'AAA' rated financial institutions has been dwindling in recent years. For example, at the start of 2008, before the global financial crisis, there was a total of 74 'AAA' rated financial services issuers globally. By the beginning of 2024, there were just three.

All three entities are government-related entities, which allows S&P Global Ratings to rate them equivalently to, or give additional notches of support from, their respective parents.

• Nederlandse Waterschapsbank N.V. (Netherlands): The issuer credit rating is in line with our rating on the Netherlands (AAA/Stable/A-1+) since we expect the bank to continue to play a vital role in providing low-cost, stable financing to the Dutch public sector, such as social housing providers, local and regional governments, and water authorities.
• Public Sector Pension Investment Board (Canada): The stand-alone credit profile of 'aaa' reflects our view of the fund's operational independence from the Canadian government, high operational effectiveness, well-diversified portfolio, strong liquidity position, management and governance, and low leverage. In addition, the 'AAA' issuer credit rating reflects our opinion that there's a moderately high likelihood that the Canadian government would provide extraordinary support in the event of financial distress.
• Zuercher Kantonalbank (Switzerland): The bank benefits from its close ties--including full ownership and a statutory guarantee--with the financially strong Canton of Zurich (AAA/Stable/--). The bank materially benefits from its superior stand-alone creditworthiness in conjunction with the full ownership by the canton and the extremely high likelihood of timely and sufficient support from the canton, if it's ever needed.

Annual Default Rates And Ratings Performance

All of our ratings performance studies have found a clear correlation between ratings and defaults: the higher the rating, the lower the observed frequency of default, and vice versa. Over each time span, lower ratings correspond to higher default rates.

We found that the same was true when we broke out the data by rating as well as by region. As the Gini ratios show, the ability of financial services ratings to serve as effective measures of relative risk remains intact, particularly across larger pools of issuers.

Many default studies, including this one, also look at transition rates, which gauge the degree to which ratings move--either up or down--over a particular period of time. Transition studies have repeatedly confirmed that higher ratings tend to be more stable and speculative-grade ratings generally experience more volatility.

Some issuers default after S&P Global Ratings no longer rates them. We make our best effort to capture such defaults in the database, and we include an entity in the annual default rate calculations if it was rated as of Jan. 1 in the year of default. If, however, S&P Global Ratings withdrew the rating prior to Jan. 1 of the year of default, we do not include the issuer in the default rate calculation in that year.

Although defaulters that are not rated (NR) are not always captured in the default rate calculations for the year of default, we do capture them in the longer-term cumulative default rate statistics, which are tied back to the year in which defaulters were last rated.

The path to default for financial services entities has been more gradual in recent years

Financial institutions (in particular, banks) found some stability in the second half of 2023 following the failures of U.S.-based banks in March and April 2023; two of the three defaults in the second half of 2023 were of NBFIs.

Financial services entities typically exhibit lower average default rates and account for fewer defaults annually than nonfinancial entities. However, the path to default for financial issuers can be relatively swift. Financial institutions are typically more confidence-sensitive than nonfinancial companies, and the loss of confidence from stakeholders (such as counterparties or funding sources) can contribute to a rapid decline in liquidity and credit quality.

In 1981-2023 financial institutions that defaulted had a median rating of 'BBB-' seven years before default, and the median rating remained investment grade (at 'BBB-') until just over five years before default. From that point, the defaulters experienced a relatively steep descent into default, with the median rating dropping to 'B+' one year before default.

By contrast, financial services entities that defaulted in the last four years typically experienced a much more gradual path to default from a much lower rating level. These issuers had a median rating of 'B+' seven years before default, and the median fell to 'B' over 3.5 years before default (see chart 10). Notably, the trailing-12-quarter median default rate for financial services entities is based on a much smaller subsample of just 18 issuers, while the full history (1981-2023) covers 329 issuers.

Financial services entities with higher initial ratings, should they default, tend to show a longer time between the initial rating and the eventual default. The time to default for a defaulting issuer generally correlates with the initial rating. For the entities that defaulted in 2023, the average time to default was 12.22 years from the initial rating, close to the average of 12 years for the issuers that defaulted in 2022 and versus 6.4 years for the issuers that defaulted in 1981-2023. This compares with an average time to default of 4.7 years for nonfinancial corporate entities.

For the entire pool of defaulters (1981-2023), the average time to default for financial services entities that were originally rated in the 'AA' category was 13.56 years from the initial rating, while those initially rated in the 'B' category defaulted 4.33 years after the initial rating, on average (see table 7). Note that the standard deviation of the time to default is also generally smaller for lower ratings.

We treat cases where an issuer emerges from a prior default (including from distressed exchanges) as a separate entity, with a new initial rating that is first recorded after the default event.

Table 7

Time to default from original rating for global financial services defaulters, 1981-2023
Original rating	Defaults (no.)	Average time from original rating (years)*	Median time from original rating (years)	Standard deviation of time from original rating (years)
AAA	5	15.44	7.61	11.88
AA	20	13.56	10.06	8.90
A	29	8.86	6.78	6.42
BBB	59	8.11	6.50	5.77
BB	70	6.12	4.86	5.43
B	105	4.33	2.98	4.00
CCC/C	41	3.10	1.25	4.02
Includes the bank, nonbank financial institution, and insurance sectors. *Or Dec. 31, 1980, whichever is later. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

While no financial services issuer has ever defaulted from the 'AAA' rating level over a one-year horizon throughout the 43-year span of our study, there have been five financial services entities that eventually defaulted after receiving an initial rating of 'AAA'.

One of these was Ally Financial Inc., formerly known as GMAC Financial, a subsidiary of General Motors Co. The issuer credit rating on this company was lowered to 'SD' from 'CC' following a distressed debt exchange in December 2008. While this issuer was initially rated 'AAA', it was downgraded to 'AA+' in 1981, more than 27 years in advance of its eventual default in 2008. While GMAC Financial was an NBFI at the time of default, the reorganized entity, Ally Financial, has since become a bank holding company.

The four other 'AAA' rated defaulters were from the insurance sector. These insurers' defaults occurred as their asset values fell or as liabilities climbed following recessions.

Three North American life insurers (Mutual Benefit Life Insurance Co., Executive Life Insurance Co. CA, and Confederation Life Insurance Co.) defaulted between 1992 and 1994 because of a combination of illiquid assets and insufficient liquidity to meet maturing liabilities. These companies had asset portfolios with heavy concentrations of speculative-grade bonds, real estate investments, or commercial real estate loans, which lost value and were increasingly illiquid following the 1991-1992 U.S. recession. As policyholders lost confidence in these insurers, they accelerated withdrawals, which exacerbated the companies' inability to meet liabilities.

The remaining defaulter was bond insurer Ambac Assurance Corp., which was downgraded to 'SD' in 2009 because of financial weakness through exposure to the U.S. subprime housing sector.

S&P Global Ratings subsequently made adjustments to its global insurance criteria to address the issues that caused these failures, including through the introduction of the capital model in 1994 and, more recently, through updates to most of the criteria for financial services companies following the global financial crisis.

Since 2011, S&P Global Ratings has further updated and revised the methodology and assumptions that it applies to determine the ratings on financial services companies. Rating methodologies and assumptions were revised in 2011 and 2019 (including a capital model update) for bond insurance, in 2013 and 2019 for insurance companies (including life, health, and property/casualty), in 2014 for NBFIs, and in 2015 and 2019 for mortgage insurance. On Nov. 15, 2023, S&P Global Ratings published "Insurer Risk-Based Capital Adequacy--Methodology And Assumptions," which provides criteria for analyzing the risk-based capital adequacy of insurers and reinsurers. S&P Global Ratings applies the output from these criteria in our insurance framework to assess capital and earnings--a key rating factor for insurers.

S&P Global Ratings updated its rating methodology and assumptions for banks in 2011. The revised criteria also consider the relationship of a country's banking industry to its financial system as a whole.

The Banking Industry Country Risk Assessment (BICRA) criteria were also updated in 2011, providing a framework to compare global banking systems, including the role of government supervision, regulation, and systemwide support programs. We use BICRA to determine a bank's anchor, the starting point in assigning an issuer credit rating.

In December 2021, S&P Global Ratings published revised criteria for financial institutions. They enhanced the consistency of our terminology and approaches, incorporated relevant developments since the publication of the previous articles (including newer or emerging risks), and enabled S&P Global Ratings to communicate more clearly about the drivers of rating changes.

Higher-rated entities had fewer defaults than lower-rated ones

The lower frequency of default among higher-rated entities and the higher rate of default among lower-rated entities have remained true over time (see chart 11).

The relationship between default rates and ratings is most apparent through the cumulative rates, with the lowest rating categories exhibiting default rates far in excess of those in the investment-grade categories.

The lowest investment-grade rating category, 'BBB', has a one-year weighted long-term average default rate (since 1981) of 0.21%. The average default rate for the 'BB' category (0.58%) is more than double that, it's even higher for the 'B' category (2.30%), and it's higher yet for the 'CCC+' or below rating category (16.94%).

The default rates for the 'B' category and for 'CCC+' or below increased in 2023 to 1.05% and 17.39%, respectively (from 0.46% and 13.64%). It decreased for the 'BB' category to 0% in 2023 (from 0.71%); the 2023 default rate for the 'BB' category is lower than its long-term weighted average of 0.58%. Only the default rates for the 'BBB' category and 'CCC+' or below were higher than their respective long-term weighted averages (0.21% and 16.94%, respectively).

For financial services, the pool of issuers rated in each speculative-grade rating category is often relatively small, particularly for the 'CCC'/'C' category. As of Jan. 1, 2024, speculative-grade ratings accounted for only 22% of financial services issuers, and the 'CCC'/'C' category accounted for roughly 1.4%.

Given the small base of ratings (particularly in earlier years), the default rate for entities rated 'CCC'/'C' has climbed to as high as 100% (in 1982, when there was only one financial services issuer rated 'CCC'/'C' at the beginning of the year), while the 'B' category default rate peaked at 25% in 1982, with one default (see table 8).

Table 8

Global financial services annual default rates by rating category (%)
	AAA	AA	A	BBB	BB	B	CCC/C
1981	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1982	0.00	0.00	0.00	0.00	0.00	25.00	100.00
1983	0.00	0.00	0.00	3.85	6.25	0.00	N/A
1984	0.00	0.00	0.00	0.00	0.00	0.00	N/A
1985	0.00	0.00	0.00	0.00	5.00	0.00	N/A
1986	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1987	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1988	0.00	0.00	0.00	0.00	2.56	17.39	0.00
1989	0.00	0.00	0.70	4.00	0.00	11.76	62.50
1990	0.00	0.00	0.00	0.00	2.63	13.33	20.00
1991	0.00	0.00	0.00	0.00	4.88	15.79	41.67
1992	0.00	0.00	0.00	0.00	0.00	5.88	66.67
1993	0.00	0.00	0.00	0.00	2.94	0.00	14.29
1994	0.00	0.00	0.36	0.00	0.00	0.00	0.00
1995	0.00	0.00	0.00	0.00	0.00	20.00	0.00
1996	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1997	0.00	0.00	0.00	1.00	0.00	5.26	0.00
1998	0.00	0.00	0.00	0.40	3.23	16.67	33.33
1999	0.00	0.28	0.40	0.40	0.00	4.65	0.00
2000	0.00	0.00	0.40	0.39	0.00	4.41	44.44
2001	0.00	0.00	0.20	0.36	5.45	3.85	20.00
2002	0.00	0.00	0.00	0.34	0.82	4.17	18.18
2003	0.00	0.00	0.00	0.28	0.00	2.06	13.04
2004	0.00	0.00	0.18	0.00	0.70	0.95	4.17
2005	0.00	0.00	0.00	0.00	0.65	0.00	0.00
2006	0.00	0.00	0.00	0.00	0.59	0.89	0.00
2007	0.00	0.00	0.00	0.00	1.19	0.81	0.00
2008	0.00	0.49	0.69	1.33	1.65	2.34	11.76
2009	0.00	0.00	0.25	1.44	0.55	9.30	26.09
2010	0.00	0.00	0.00	0.00	2.65	0.78	24.14
2011	0.00	0.00	0.00	0.21	0.00	3.29	11.76
2012	0.00	0.00	0.00	0.00	0.49	0.62	14.29
2013	0.00	0.00	0.00	0.00	0.00	1.09	5.26
2014	0.00	0.00	0.00	0.00	0.00	0.48	5.71
2015	0.00	0.00	0.00	0.00	0.00	2.59	22.22
2016	0.00	0.00	0.00	0.17	0.00	3.31	31.82
2017	0.00	0.00	0.00	0.00	0.00	1.21	16.67
2018	0.00	0.00	0.00	0.00	0.00	1.21	18.75
2019	0.00	0.00	0.00	0.00	0.00	1.54	41.67
2020	0.00	0.00	0.00	0.00	0.00	1.19	66.67
2021	0.00	0.00	0.00	0.00	0.00	1.24	0.00
2022	0.00	0.00	0.00	0.00	0.71	0.46	13.64
2023	0.00	0.00	0.00	0.35	0.00	1.05	17.39
Minimum	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Maximum	0.00	0.49	0.70	4.00	6.25	25.00	100.00
Weighted long-term average	0.00	0.03	0.07	0.21	0.58	2.30	16.94
Median	0.00	0.00	0.00	0.00	0.00	1.21	13.96
Standard deviation	0.00	0.09	0.18	0.87	1.70	6.27	23.00
Includes the bank, nonbank financial institution, and insurance sectors. N/A--Not applicable. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

By contrast, the relationship is slightly more discontinuous when we examine rating transitions across modifiers (the plus or minus after a rating) or by sector, but these variations are likely a result of sample-size considerations, and we do not consider them to be significant (see table 9 for default rates by rating modifier and Appendix I for default rates by sector).

Additionally, when examining default rates by rating modifier, we see a few higher-than-expected default rates for some investment-grade ratings in certain years. For instance, in 1983, the default rate for 'BBB-' rated financial services issuers climbed to 16.67%. Notably, this rate reflected the default of just one issuer, and the default rate for the 'BBB' category as a whole in 1983 was just 3.85%.

Since 1981, no financial services issuers rated 'AAA' or 'AA+' have defaulted over a one-year horizon. However, over this period, three financial services issuers rated either 'AA' or 'AA-' defaulted:

• General American Life Insurance Co.: After aggressively growing its guaranteed investment contract product line in prior years, the company did not have sufficient liquidity and was taken under administrative supervision in 1999 following a spike in surrender rates on the contracts.
• Lehman Brothers Inc.: The company filed for Chapter 11 bankruptcy protection in 2008 following the deterioration of its U.S. subprime housing assets.
• BluePoint Re: The company was taken over by its regulatory authority in 2008 as projected losses mounted on subprime and second-lien residential mortgage-backed security and asset-backed security collateralized debt obligations that it had reinsured.

After close to 10 years of no defaults of investment-grade entities, there were two defaults in 2023 involving issuers that were rated in the 'BBB' category a year before default.

In the last 15 years, there were a total of 13 defaults of investment-grade financial institutions, nine of them in 2009 as a consequence of the global financial crisis. The number of investment-grade defaults is still low compared with the number of defaults of speculative-grade issuers, which accounted for 90% of the total number of defaults in the last 15 years.

Table 9

Global financial services annual default rates by rating modifier (%)
	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C
1981	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	N/A	0.00	N/A	0.00
1982	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	100.00	100.00
1983	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	16.67	14.29	0.00	0.00	0.00	0.00	N/A	N/A
1984	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	N/A	N/A
1985	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	11.11	0.00	0.00	0.00	0.00	0.00	N/A
1986	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1987	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1988	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	6.25	9.09	0.00	50.00	0.00
1989	0.00	0.00	0.00	0.00	0.00	0.00	2.70	6.25	5.00	0.00	0.00	0.00	0.00	0.00	12.50	100.00	62.50
1990	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	8.33	0.00	0.00	0.00	16.67	25.00	20.00
1991	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	11.76	0.00	0.00	0.00	28.57	25.00	41.67
1992	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	33.33	66.67
1993	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	9.09	0.00	0.00	0.00	0.00	14.29
1994	0.00	0.00	0.00	0.00	1.14	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	N/A	0.00
1995	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	9.09	28.57	50.00	0.00
1996	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
1997	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.28	1.59	0.00	0.00	0.00	0.00	0.00	0.00	33.33	0.00
1998	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.28	0.00	10.00	0.00	11.54	30.77	0.00	33.33
1999	0.00	0.00	0.00	0.61	0.00	0.52	0.76	0.00	1.11	0.00	0.00	0.00	0.00	9.09	0.00	0.00	0.00
2000	0.00	0.00	0.00	0.00	0.00	0.59	0.76	0.00	0.00	1.32	0.00	0.00	0.00	6.45	3.85	0.00	44.44
2001	0.00	0.00	0.00	0.00	0.00	0.56	0.00	0.00	0.90	0.00	0.00	2.50	17.86	0.00	6.90	7.69	20.00
2002	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.23	2.38	0.00	0.00	6.06	0.00	8.33	18.18
2003	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.75	0.00	0.00	0.00	0.00	0.00	7.14	0.00	13.04
2004	0.00	0.00	0.00	0.00	0.00	0.53	0.00	0.00	0.00	0.00	0.00	1.69	0.00	2.56	0.00	0.00	4.17
2005	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.50	0.00	0.00	0.00	0.00
2006	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.69	0.00	0.00	0.00	0.00	3.23	0.00
2007	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.89	1.89	1.85	0.00	0.00	0.00
2008	0.00	0.00	0.58	0.51	0.47	0.36	1.27	0.52	2.26	1.63	4.55	0.00	0.00	0.00	3.70	4.17	11.76
2009	0.00	0.00	0.00	0.00	0.00	0.68	0.00	0.56	0.61	3.52	0.00	1.96	0.00	9.09	13.33	5.00	26.09
2010	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.08	2.13	2.60	0.00	0.00	2.22	24.14
2011	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.70	0.00	0.00	0.00	1.85	4.92	2.70	11.76
2012	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.82	1.56	0.00	0.00	14.29
2013	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.57	5.26
2014	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.45	0.00	0.00	5.71
2015	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	5.41	0.93	1.96	22.22
2016	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.57	0.00	0.00	0.00	0.00	1.22	1.03	9.52	31.82
2017	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.94	1.41	16.67
2018	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.27	1.41	18.75
2019	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	6.45	41.67
2020	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.82	1.43	66.67
2021	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.27	0.00	2.78	0.00
2022	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.50	1.28	0.00	0.00	13.64
2023	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.48	0.42	0.00	0.00	0.00	0.00	0.00	0.00	3.57	17.39
Minimum	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Maximum	0.00	0.00	0.58	0.61	1.14	0.68	2.70	6.25	5.00	16.67	14.29	10.00	17.86	11.54	30.77	100.00	100.00
Weighted long-term average	0.00	0.00	0.03	0.04	0.03	0.09	0.09	0.10	0.23	0.35	0.62	0.45	0.65	1.71	2.06	3.53	16.94
Median	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.22	13.96
Standard deviation	0.00	0.00	0.09	0.12	0.19	0.19	0.47	0.97	0.87	2.59	3.44	2.09	2.90	3.30	8.05	24.54	23.00
Includes the bank, nonbank financial institution, and insurance sectors. N/A--Not applicable. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Average Transition Tables And Cumulative Default Rates

This study--in line with previous default studies--confirms that over the long term (1981-2023), higher ratings are more stable than lower ratings. For financial services entities, the highest rating categories ('AAA', 'AA', and 'A') each displayed stability rates of 87% or higher for a one-year horizon.

Of these three rating categories, the 'A' category had the highest rate of stability, at 89.97% (meaning that 89.97% of 'A' rated issuers remained within that rating category over one year). The stability rates for the 'AAA' and 'AA' categories were slightly lower but still very high, at 87.38% and 87.93%, respectively.

In comparison, the 'B' category had a notably lower stability rate of 76.69% over one year (see table 10).

When we examine rating transitions by modifier, the general relationship between rating and stability tends to hold (see table 11). For example, 'A+' rated issuers were still rated 'A+' one year later 80.64% of the time, and 'A-' rated issuers were still rated 'A-' one year later 79.16% of the time.

These long-term relationships also broadly hold when transition rates are calculated over longer time horizons and when broken out by region, though we do see some exceptions, largely because of sample-size considerations, which we do not consider significant (see table 12).

Over the long term (1981-2023), heightened ratings stability is broadly consistent with higher ratings. A key observation when analyzing transition matrices that present averages computed over multiple static pools is that the standard deviations associated with each transition point in the matrix are large relative to the averages (outside of stability rates).

Table 10

Global average transition rates for financial services, 1981-2023 (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One-year
AAA	87.38	9.29	0.32	0.04	0.08	0.04	0.08	0.00	2.76
	(10.05)	(9.52)	(0.96)	(0.22)	(0.36)	(0.23)	(0.47)	(0.00)	(2.63)
AA	0.42	87.93	7.57	0.32	0.02	0.02	0.03	0.03	3.67
	(0.55)	(6.20)	(5.51)	(0.60)	(0.07)	(0.07)	(0.15)	(0.11)	(1.76)
A	0.02	1.93	89.97	3.26	0.16	0.05	0.01	0.07	4.53
	(0.12)	(1.68)	(4.38)	(2.53)	(0.42)	(0.14)	(0.04)	(0.17)	(2.00)
BBB	0.00	0.17	4.05	85.52	2.86	0.35	0.10	0.21	6.76
	(0.00)	(0.47)	(2.87)	(5.03)	(2.39)	(0.81)	(0.24)	(0.47)	(1.92)
BB	0.00	0.07	0.16	5.39	78.14	4.48	0.58	0.58	10.61
	(0.00)	(0.25)	(0.62)	(3.96)	(7.31)	(3.12)	(1.47)	(1.16)	(4.50)
B	0.00	0.02	0.07	0.37	6.04	76.69	3.16	2.30	11.35
	(0.00)	(0.19)	(0.55)	(0.76)	(4.09)	(7.00)	(3.28)	(3.20)	(3.83)
CCC/C	0.00	0.00	0.00	0.00	1.09	15.85	47.91	16.94	18.21
	(0.00)	(0.00)	(0.00)	(0.00)	(3.73)	(12.62)	(19.88)	(15.84)	(11.29)
Three-year
AAA	65.64	23.55	1.59	0.33	0.12	0.08	0.16	0.20	8.34
	(16.60)	(16.30)	(2.14)	(1.10)	(0.43)	(0.34)	(0.57)	(0.52)	(5.86)
AA	0.98	68.66	17.70	1.54	0.15	0.13	0.03	0.17	10.63
	(1.00)	(10.98)	(8.24)	(1.62)	(0.31)	(0.33)	(0.09)	(0.28)	(3.88)
A	0.06	4.53	73.75	6.87	0.81	0.18	0.08	0.30	13.41
	(0.16)	(3.46)	(8.77)	(3.06)	(1.17)	(0.45)	(0.19)	(0.48)	(4.67)
BBB	0.00	0.46	10.00	64.44	4.76	0.83	0.25	0.93	18.33
	(0.00)	(1.02)	(5.87)	(8.84)	(2.74)	(0.93)	(0.58)	(1.30)	(4.27)
BB	0.00	0.10	0.62	12.13	49.35	7.28	0.75	2.29	27.49
	(0.00)	(0.34)	(1.38)	(6.44)	(11.18)	(3.77)	(1.38)	(3.53)	(6.49)
B	0.00	0.00	0.23	1.36	11.90	48.36	3.95	6.82	27.37
	(0.00)	(0.00)	(0.83)	(2.24)	(6.29)	(9.43)	(2.99)	(6.38)	(5.94)
CCC/C	0.00	0.00	0.20	0.40	1.39	25.40	11.31	25.00	36.31
	(0.00)	(0.00)	(3.19)	(2.58)	(3.52)	(15.63)	(12.02)	(16.73)	(14.83)
Five-year
AAA	48.55	31.10	4.32	0.69	0.04	0.20	0.12	0.53	14.43
	(17.22)	(17.57)	(3.73)	(1.46)	(0.24)	(0.54)	(0.40)	(0.85)	(8.19)
AA	1.22	55.15	23.28	2.58	0.29	0.23	0.04	0.43	16.77
	(1.18)	(11.64)	(7.67)	(2.13)	(0.44)	(0.53)	(0.18)	(0.75)	(4.76)
A	0.09	5.83	61.94	8.41	1.29	0.25	0.13	0.59	21.46
	(0.21)	(3.97)	(9.93)	(2.98)	(1.33)	(0.40)	(0.27)	(0.73)	(5.76)
BBB	0.02	0.76	12.81	50.62	4.82	0.91	0.32	1.70	28.05
	(0.09)	(1.67)	(5.86)	(9.51)	(2.65)	(0.80)	(0.59)	(1.89)	(5.49)
BB	0.00	0.17	1.29	14.03	32.88	6.93	0.54	3.98	40.18
	(0.00)	(0.57)	(2.36)	(6.10)	(9.62)	(3.80)	(1.48)	(5.14)	(6.32)
B	0.00	0.06	0.41	2.23	12.69	33.21	3.14	9.84	38.41
	(0.00)	(0.55)	(1.11)	(3.14)	(6.10)	(9.12)	(2.39)	(7.54)	(7.40)
CCC/C	0.00	0.00	0.21	0.42	3.56	19.87	3.35	28.87	43.72
	(0.00)	(0.00)	(3.27)	(1.41)	(5.78)	(11.98)	(5.98)	(17.02)	(14.45)
10-year
AAA	23.01	38.41	8.59	2.01	0.08	0.29	0.08	0.94	26.58
	(12.33)	(16.35)	(4.96)	(2.63)	(0.29)	(0.65)	(0.31)	(1.12)	(9.05)
AA	1.03	33.74	28.35	4.16	0.34	0.31	0.02	1.05	30.99
	(1.15)	(8.83)	(6.23)	(2.28)	(0.37)	(0.40)	(0.08)	(1.16)	(5.34)
A	0.14	6.82	43.14	8.76	1.56	0.42	0.11	1.39	37.67
	(0.37)	(3.06)	(7.96)	(2.67)	(1.22)	(0.43)	(0.21)	(1.19)	(5.58)
BBB	0.04	1.26	13.52	30.25	3.87	1.08	0.35	3.57	46.06
	(0.13)	(2.55)	(3.38)	(7.11)	(1.73)	(0.47)	(0.56)	(2.51)	(4.85)
BB	0.00	0.12	2.93	14.01	13.27	6.20	0.15	7.47	55.83
	(0.00)	(0.32)	(3.12)	(5.07)	(6.89)	(3.04)	(0.27)	(8.11)	(6.68)
B	0.00	0.00	1.01	4.55	8.92	14.99	1.38	14.90	54.25
	(0.00)	(0.00)	(2.45)	(4.88)	(3.87)	(6.88)	(2.13)	(9.00)	(9.15)
CCC/C	0.00	0.00	0.27	1.06	5.04	7.43	2.92	30.77	52.52
	(0.00)	(0.00)	(3.69)	(2.14)	(6.36)	(8.01)	(5.91)	(17.45)	(14.83)
Includes the bank, nonbank financial institution, and insurance sectors. Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 11

Average one-year transition rates for global financial services by rating modifier, 1981-2023 (%)
Rating	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C	D	NR
AAA	87.38	6.98	1.66	0.65	0.08	0.20	0.04	0.00	0.04	0.00	0.04	0.04	0.00	0.00	0.04	0.00	0.08	0.00	2.76
	(10.05)	(8.60)	(2.15)	(1.09)	(0.52)	(0.66)	(0.19)	(0.00)	(0.22)	(0.00)	(0.31)	(0.19)	(0.00)	(0.00)	(0.23)	(0.00)	(0.47)	(0.00)	(2.63)
AA+	1.62	80.21	11.29	3.11	0.65	0.39	0.19	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.53
	(2.61)	(14.90)	(9.97)	(4.72)	(2.98)	(1.21)	(0.60)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(2.90)
AA	0.41	1.37	80.33	9.54	2.83	1.02	0.35	0.26	0.15	0.06	0.03	0.03	0.00	0.00	0.00	0.00	0.09	0.03	3.50
	(0.78)	(2.07)	(12.40)	(8.87)	(3.63)	(1.74)	(0.84)	(0.66)	(0.59)	(0.29)	(0.15)	(0.15)	(0.00)	(0.00)	(0.00)	(0.00)	(0.37)	(0.13)	(2.40)
AA-	0.06	0.12	3.53	80.05	9.42	1.77	0.53	0.19	0.12	0.00	0.00	0.00	0.00	0.02	0.02	0.00	0.00	0.04	4.13
	(0.20)	(0.36)	(4.84)	(8.95)	(5.98)	(2.99)	(0.90)	(0.64)	(0.33)	(0.00)	(0.00)	(0.00)	(0.00)	(0.11)	(0.11)	(0.00)	(0.00)	(0.14)	(2.33)
A+	0.00	0.12	0.34	4.54	80.64	7.49	1.37	0.41	0.29	0.07	0.01	0.07	0.00	0.01	0.00	0.00	0.00	0.03	4.61
	(0.00)	(0.39)	(0.70)	(4.02)	(8.36)	(4.85)	(1.83)	(0.66)	(0.63)	(0.40)	(0.16)	(0.50)	(0.00)	(0.16)	(0.00)	(0.00)	(0.00)	(0.15)	(2.44)
A	0.01	0.05	0.15	0.46	6.38	79.94	6.01	1.48	0.54	0.22	0.04	0.04	0.00	0.01	0.04	0.00	0.01	0.09	4.52
	(0.08)	(0.25)	(0.51)	(0.77)	(3.62)	(7.53)	(4.14)	(1.98)	(0.81)	(0.56)	(0.23)	(0.13)	(0.00)	(0.08)	(0.20)	(0.00)	(0.07)	(0.21)	(2.73)
A-	0.06	0.01	0.06	0.21	0.49	8.04	79.16	5.05	1.37	0.55	0.13	0.09	0.10	0.06	0.03	0.00	0.01	0.09	4.47
	(0.51)	(0.11)	(0.19)	(0.57)	(0.71)	(4.92)	(7.32)	(3.11)	(1.80)	(1.11)	(0.54)	(0.29)	(0.37)	(0.23)	(0.15)	(0.00)	(0.11)	(0.34)	(2.21)
BBB+	0.00	0.00	0.08	0.14	0.37	0.68	7.83	76.34	6.65	1.27	0.37	0.21	0.10	0.08	0.08	0.02	0.10	0.10	5.59
	(0.00)	(0.00)	(0.36)	(0.52)	(0.59)	(1.77)	(5.22)	(8.09)	(4.42)	(1.98)	(0.92)	(0.79)	(0.82)	(1.06)	(0.63)	(0.10)	(0.48)	(0.41)	(3.12)
BBB	0.00	0.02	0.06	0.08	0.13	0.30	0.98	9.25	74.99	5.13	1.25	0.47	0.25	0.21	0.08	0.02	0.08	0.23	6.45
	(0.00)	(0.36)	(0.36)	(0.57)	(0.54)	(0.87)	(1.48)	(5.83)	(8.49)	(4.53)	(1.76)	(0.87)	(0.86)	(0.55)	(0.41)	(0.11)	(0.27)	(0.57)	(2.79)
BBB-	0.00	0.03	0.03	0.03	0.06	0.18	0.20	1.05	9.60	71.46	5.40	1.46	0.47	0.44	0.09	0.12	0.12	0.35	8.93
	(0.00)	(0.17)	(0.17)	(0.30)	(0.44)	(0.79)	(0.71)	(1.50)	(5.01)	(8.16)	(4.53)	(2.48)	(1.33)	(1.52)	(0.52)	(0.90)	(0.32)	(1.06)	(3.41)
BB+	0.00	0.00	0.00	0.10	0.10	0.15	0.10	0.31	1.44	10.92	64.40	7.21	2.42	0.82	0.31	0.26	0.46	0.62	10.36
	(0.00)	(0.00)	(0.00)	(0.54)	(0.42)	(1.10)	(0.97)	(0.99)	(2.76)	(6.24)	(9.29)	(7.32)	(2.57)	(1.36)	(0.89)	(0.62)	(1.88)	(1.97)	(5.38)
BB	0.00	0.00	0.06	0.06	0.00	0.06	0.06	0.22	0.51	2.13	10.28	64.80	7.19	1.40	0.90	0.17	0.79	0.45	10.95
	(0.00)	(0.00)	(0.37)	(0.34)	(0.00)	(1.07)	(0.31)	(0.88)	(1.89)	(3.97)	(6.64)	(10.87)	(7.40)	(2.62)	(2.14)	(0.90)	(2.51)	(1.43)	(5.94)
BB-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.05	0.15	0.40	2.19	8.61	67.65	6.27	2.24	0.75	0.50	0.65	10.55
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.71)	(0.50)	(2.13)	(3.47)	(7.45)	(12.27)	(5.22)	(3.30)	(2.67)	(1.61)	(2.27)	(6.54)
B+	0.00	0.00	0.00	0.00	0.00	0.00	0.06	0.00	0.06	0.32	0.44	2.27	11.43	61.53	7.96	2.53	1.07	1.71	10.61
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.85)	(0.00)	(0.29)	(1.24)	(1.74)	(3.43)	(7.00)	(9.01)	(5.71)	(3.11)	(2.50)	(2.80)	(5.39)
B	0.00	0.00	0.00	0.06	0.00	0.06	0.00	0.12	0.06	0.24	0.18	0.18	1.39	9.46	62.89	8.55	2.73	2.06	12.01
	(0.00)	(0.00)	(0.00)	(0.48)	(0.00)	(0.48)	(0.00)	(0.53)	(0.30)	(0.54)	(0.93)	(1.51)	(2.85)	(7.11)	(8.67)	(6.52)	(3.30)	(4.63)	(5.69)
B-	0.00	0.00	0.00	0.00	0.00	0.09	0.00	0.09	0.19	0.00	0.09	0.19	0.37	2.33	12.93	61.86	6.88	3.53	11.44
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(1.78)	(0.00)	(1.54)	(1.00)	(0.00)	(0.60)	(1.10)	(0.95)	(4.35)	(8.88)	(12.34)	(9.67)	(7.11)	(5.50)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.18	0.36	0.55	1.09	1.64	13.11	47.91	16.94	18.21
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(2.15)	(2.47)	(1.99)	(3.66)	(3.94)	(11.52)	(19.88)	(15.84)	(11.29)
Includes the bank, nonbank financial institution, and insurance sectors. Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 12

Average one-year financial services transition rates by major region, 1981-2023 (%)
Rating	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	88.38	8.72	0.32	0.06	0.13	0.06	0.06	0.00	2.27
	(13.28)	(12.44)	(1.35)	(0.35)	(0.57)	(0.36)	(0.36)	(0.00)	(2.55)
AA	0.50	88.12	7.08	0.36	0.04	0.04	0.06	0.06	3.75
	(0.71)	(7.57)	(6.18)	(0.79)	(0.15)	(0.14)	(0.25)	(0.23)	(2.20)
A	0.04	2.08	89.70	3.28	0.24	0.09	0.02	0.10	4.44
	(0.19)	(1.96)	(5.11)	(2.99)	(0.60)	(0.27)	(0.08)	(0.29)	(2.66)
BBB	0.00	0.26	3.78	85.69	2.46	0.54	0.19	0.35	6.74
	(0.00)	(0.65)	(2.48)	(6.08)	(2.72)	(1.25)	(0.38)	(0.77)	(2.73)
BB	0.00	0.22	0.33	7.01	74.48	5.70	1.15	0.88	10.24
	(0.00)	(0.71)	(0.97)	(6.18)	(10.26)	(4.49)	(2.35)	(1.62)	(5.67)
B	0.00	0.06	0.19	0.51	5.59	75.87	3.94	2.73	11.11
	(0.00)	(0.46)	(1.00)	(1.37)	(5.25)	(10.79)	(4.81)	(4.39)	(6.24)
CCC/C	0.00	0.00	0.00	0.00	2.44	12.20	39.51	29.27	16.59
	(0.00)	(0.00)	(0.00)	(0.00)	(6.04)	(14.78)	(23.00)	(26.02)	(16.79)
Europe
AAA	86.37	9.52	0.33	0.00	0.00	0.00	0.16	0.00	3.61
	(10.11)	(9.51)	(1.36)	(0.00)	(0.00)	(0.00)	(1.05)	(0.00)	(5.05)
AA	0.29	86.65	9.04	0.42	0.00	0.00	0.00	0.00	3.61
	(0.90)	(8.16)	(7.60)	(1.04)	(0.00)	(0.00)	(0.00)	(0.00)	(2.62)
A	0.02	2.11	88.80	3.55	0.14	0.00	0.00	0.05	5.34
	(0.07)	(2.31)	(5.42)	(3.83)	(0.42)	(0.00)	(0.00)	(0.13)	(2.53)
BBB	0.00	0.16	6.57	80.22	3.24	0.16	0.08	0.04	9.53
	(0.00)	(2.08)	(4.27)	(7.93)	(4.43)	(0.52)	(0.35)	(0.22)	(4.66)
BB	0.00	0.00	0.28	6.89	70.89	4.36	0.70	0.14	16.74
	(0.00)	(0.00)	(1.64)	(6.70)	(13.44)	(5.22)	(3.58)	(0.57)	(11.25)
B	0.00	0.00	0.00	1.75	9.62	68.22	1.46	1.75	17.20
	(0.00)	(0.00)	(0.00)	(4.95)	(8.02)	(14.85)	(3.02)	(4.80)	(13.93)
CCC/C	0.00	0.00	0.00	0.00	0.00	13.95	48.84	20.93	16.28
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(27.54)	(47.77)	(27.94)	(31.76)
Emerging and frontier markets
AAA	86.36	4.55	0.00	0.00	0.00	0.00	0.00	0.00	9.09
	(35.13)	(21.32)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(29.42)
AA	0.61	88.41	7.93	0.00	0.00	0.00	0.00	0.00	3.05
	(3.19)	(15.39)	(13.37)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(6.11)
A	0.00	0.82	93.15	3.71	0.00	0.05	0.00	0.00	2.27
	(0.00)	(1.11)	(4.77)	(4.58)	(0.00)	(0.24)	(0.00)	(0.00)	(1.47)
BBB	0.00	0.03	1.92	89.16	3.76	0.19	0.00	0.11	4.83
	(0.00)	(0.16)	(2.40)	(6.13)	(4.82)	(1.13)	(0.00)	(0.52)	(2.50)
BB	0.00	0.00	0.00	3.92	82.08	4.09	0.20	0.44	9.28
	(0.00)	(0.00)	(0.00)	(4.12)	(6.73)	(3.38)	(0.84)	(1.58)	(5.95)
B	0.00	0.00	0.00	0.17	5.96	79.12	2.70	1.78	10.27
	(0.00)	(0.00)	(0.00)	(0.40)	(5.51)	(6.65)	(3.96)	(3.29)	(4.43)
CCC/C	0.00	0.00	0.00	0.00	0.00	19.34	54.38	5.84	20.44
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(16.04)	(20.95)	(9.37)	(13.59)
Other developed
AAA	83.67	12.75	0.40	0.00	0.00	0.00	0.00	0.00	3.19
	(17.38)	(16.72)	(2.58)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(7.90)
AA	0.38	89.78	6.22	0.00	0.00	0.00	0.00	0.00	3.62
	(1.64)	(7.64)	(6.46)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(3.65)
A	0.00	1.70	91.26	2.34	0.06	0.03	0.00	0.06	4.55
	(0.00)	(2.32)	(7.15)	(4.52)	(0.46)	(0.23)	(0.00)	(1.10)	(3.96)
BBB	0.00	0.15	6.22	84.26	1.54	0.29	0.00	0.22	7.32
	(0.00)	(1.98)	(8.92)	(9.56)	(3.32)	(1.44)	(0.00)	(0.79)	(4.81)
BB	0.00	0.00	0.28	6.18	77.81	2.25	0.56	0.84	12.08
	(0.00)	(0.00)	(1.28)	(8.49)	(15.57)	(4.04)	(2.18)	(3.72)	(10.61)
B	0.00	0.00	0.00	0.00	8.03	63.50	3.65	6.57	18.25
	(0.00)	(0.00)	(0.00)	(0.00)	(13.31)	(26.46)	(6.88)	(12.78)	(25.09)
CCC/C	0.00	0.00	0.00	0.00	3.23	9.68	41.94	25.81	19.35
	(0.00)	(0.00)	(0.00)	(0.00)	(18.29)	(21.81)	(43.03)	(29.71)	(27.10)
Includes the bank, nonbank financial institution, and insurance sectors. Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Lower Ratings Are Consistent With Higher Default Vulnerability

Lower ratings continue to exhibit higher default rates over each time span (as in, for example, the one- to 15-year time horizons shown in table 13). This generally holds true across regions as well, though some exceptions occur when the number of defaults is low or when the underlying population of issuers is very small--such as in the highest and lowest rating categories, or at the rating modifier level (see tables 14 and 15).

Investment-grade issuers seldom default, so the number of defaults in these rating categories is particularly low. This small sample size can result in historical default rates that seem counterintuitive. The cumulative default rates by rating modifier do not imply, for example, that 'AAA' rated companies are riskier than 'AA+' rated companies over a horizon of less than 10 years, but rather that companies at both rating levels are highly unlikely to default. Each of the rating levels from 'AAA' to 'A-' exhibits a 15-year cumulative default rate below 2.0%.

Table 13

Global financial services average cumulative default rates, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.04	0.20	0.37	0.53	0.69	0.77	0.86	0.90	0.94	0.98	1.02	1.06	1.10	1.15
AA	0.03	0.09	0.16	0.29	0.42	0.55	0.64	0.75	0.85	0.93	1.00	1.05	1.11	1.16	1.21
A	0.07	0.17	0.29	0.42	0.54	0.67	0.81	0.91	1.00	1.11	1.20	1.27	1.35	1.41	1.49
BBB	0.21	0.56	0.93	1.31	1.61	1.89	2.15	2.40	2.65	2.86	3.10	3.35	3.61	3.92	4.22
BB	0.58	1.38	2.23	3.04	3.77	4.48	5.00	5.35	5.63	5.89	6.19	6.46	6.54	6.58	6.63
B	2.30	4.73	6.63	8.01	9.13	10.16	10.90	11.71	12.56	13.40	14.22	14.74	15.18	15.60	15.90
CCC/C	16.94	22.07	25.05	27.14	28.61	29.67	30.98	32.12	32.60	33.11	33.11	33.72	34.67	35.35	35.73
Investment grade	0.10	0.25	0.44	0.64	0.81	0.98	1.14	1.28	1.40	1.53	1.64	1.75	1.86	1.98	2.09
Speculative grade	2.13	3.82	5.20	6.31	7.24	8.10	8.75	9.33	9.84	10.33	10.81	11.19	11.47	11.69	11.86
All rated	0.47	0.90	1.30	1.66	1.97	2.25	2.49	2.70	2.88	3.06	3.23	3.37	3.51	3.64	3.76
Includes the bank, nonbank financial institution, and insurance sectors. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 14

Global financial services average cumulative default rates by rating modifier, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.04	0.20	0.37	0.53	0.69	0.77	0.86	0.90	0.94	0.98	1.02	1.06	1.10	1.15
AA+	0.00	0.07	0.07	0.07	0.07	0.07	0.07	0.15	0.23	0.31	0.40	0.49	0.58	0.68	0.78
AA	0.03	0.06	0.15	0.36	0.58	0.77	0.96	1.12	1.26	1.36	1.43	1.50	1.57	1.64	1.72
AA-	0.04	0.12	0.20	0.31	0.41	0.55	0.59	0.66	0.74	0.82	0.87	0.90	0.93	0.96	0.96
A+	0.03	0.04	0.14	0.21	0.28	0.33	0.41	0.49	0.55	0.61	0.68	0.76	0.83	0.92	1.04
A	0.09	0.22	0.35	0.50	0.59	0.75	0.92	1.00	1.13	1.27	1.33	1.40	1.47	1.54	1.62
A-	0.09	0.23	0.39	0.54	0.75	0.92	1.09	1.24	1.30	1.42	1.57	1.64	1.73	1.76	1.80
BBB+	0.10	0.28	0.47	0.72	0.88	1.06	1.30	1.50	1.72	1.92	2.21	2.44	2.69	2.96	3.26
BBB	0.23	0.61	0.87	1.20	1.54	1.95	2.21	2.49	2.75	2.89	3.03	3.23	3.40	3.54	3.69
BBB-	0.35	0.90	1.69	2.34	2.79	3.04	3.31	3.59	3.89	4.21	4.51	4.84	5.26	5.86	6.37
BB+	0.62	0.99	1.78	2.53	3.27	3.98	4.60	4.82	4.98	5.15	5.44	5.64	5.76	5.76	5.76
BB	0.45	1.38	2.17	2.55	3.08	3.58	3.88	4.29	4.73	5.01	5.22	5.44	5.44	5.44	5.44
BB-	0.65	1.76	2.73	4.02	4.95	5.88	6.51	6.93	7.21	7.51	7.96	8.33	8.47	8.61	8.78
B+	1.71	3.75	5.56	6.52	7.07	7.58	8.04	8.43	8.86	9.33	9.95	10.36	10.81	11.13	11.31
B	2.06	4.15	5.76	6.98	8.00	9.37	10.11	11.35	12.72	14.03	14.33	14.33	14.33	14.33	14.33
B-	3.53	7.07	9.55	11.80	14.00	15.33	16.50	17.32	18.04	18.83	20.79	22.28	23.37	24.57	25.64
CCC/C	16.94	22.07	25.05	27.14	28.61	29.67	30.98	32.12	32.60	33.11	33.11	33.72	34.67	35.35	35.73
Investment grade	0.10	0.25	0.44	0.64	0.81	0.98	1.14	1.28	1.40	1.53	1.64	1.75	1.86	1.98	2.09
Speculative grade	2.13	3.82	5.20	6.31	7.24	8.10	8.75	9.33	9.84	10.33	10.81	11.19	11.47	11.69	11.86
All rated	0.47	0.90	1.30	1.66	1.97	2.25	2.49	2.70	2.88	3.06	3.23	3.37	3.51	3.64	3.76
Includes the bank, nonbank financial institution, and insurance sectors. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 15

Global financial services average cumulative default rates by major region, 1981-2023 (%)
	--Time horizon (years)--
	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
U.S.
AAA	0.00	0.06	0.25	0.44	0.63	0.82	0.88	0.95	1.01	1.07	1.14	1.20	1.26	1.33	1.39
AA	0.06	0.14	0.25	0.44	0.62	0.81	0.97	1.15	1.28	1.42	1.52	1.60	1.67	1.75	1.84
A	0.10	0.28	0.52	0.77	0.99	1.22	1.43	1.60	1.75	1.93	2.10	2.24	2.38	2.48	2.60
BBB	0.35	0.94	1.57	2.17	2.68	3.10	3.52	3.94	4.38	4.71	5.04	5.33	5.63	6.02	6.39
BB	0.88	2.36	4.02	5.50	6.60	8.03	8.96	9.71	10.34	10.92	11.62	12.17	12.37	12.47	12.57
B	2.73	6.32	9.19	10.91	12.44	13.84	14.50	15.13	15.92	16.68	17.36	17.65	17.98	18.33	18.52
CCC/C	29.27	36.14	40.07	42.07	44.09	45.61	48.18	49.78	49.78	49.78	49.78	49.78	49.78	49.78	49.78
Investment grade	0.15	0.40	0.71	1.03	1.31	1.57	1.80	2.02	2.23	2.43	2.60	2.75	2.90	3.05	3.21
Speculative grade	3.30	6.01	8.34	9.96	11.30	12.73	13.67	14.44	15.09	15.69	16.33	16.75	16.97	17.14	17.27
All rated	0.59	1.18	1.76	2.25	2.67	3.08	3.40	3.69	3.94	4.18	4.41	4.59	4.74	4.90	5.05
Other developed
AAA	0.00	0.00	0.40	0.80	1.21	1.62	2.02	2.43	2.43	2.43	2.43	2.43	2.43	2.43	2.43
AA	0.00	0.06	0.06	0.13	0.20	0.27	0.27	0.27	0.35	0.43	0.52	0.60	0.69	0.79	0.79
A	0.06	0.06	0.06	0.06	0.10	0.14	0.28	0.37	0.43	0.48	0.48	0.48	0.48	0.48	0.48
BBB	0.22	0.52	0.92	1.33	1.51	1.68	1.78	1.87	1.87	1.87	1.99	2.11	2.23	2.37	2.37
BB	0.84	1.73	2.34	2.99	3.66	4.01	4.37	4.37	4.37	4.37	4.37	4.37	4.37	4.37	4.37
B	6.57	11.24	14.59	19.23	21.25	23.41	23.41	23.41	23.41	23.41	23.41	23.41	23.41	23.41	23.41
CCC/C	25.81	32.26	35.65	35.65	35.65	35.65	35.65	35.65	35.65	35.65	35.65	35.65	35.65	35.65	35.65
Investment grade	0.08	0.16	0.26	0.39	0.48	0.58	0.68	0.76	0.81	0.86	0.91	0.96	1.02	1.08	1.08
Speculative grade	3.82	6.03	7.50	9.07	10.01	10.75	11.01	11.01	11.01	11.01	11.01	11.01	11.01	11.01	11.01
All rated	0.37	0.61	0.81	1.04	1.20	1.34	1.45	1.53	1.57	1.62	1.67	1.72	1.77	1.83	1.83
Europe
AAA	--	--	--	--	--	--	--	--	--	--	--	--	--	--	--
AA	--	0.03	0.07	0.13	0.20	0.28	0.31	0.35	0.39	0.39	0.39	0.39	0.39	0.39	0.39
A	0.05	0.09	0.14	0.18	0.21	0.25	0.31	0.33	0.35	0.38	0.38	0.38	0.38	0.41	0.44
BBB	0.04	0.12	0.12	0.17	0.17	0.37	0.53	0.71	0.89	1.09	1.38	1.77	2.21	2.59	3.00
BB	0.14	0.29	0.45	0.61	1.51	1.51	1.51	1.51	1.51	1.51	1.51	1.51	1.51	1.51	1.51
B	1.75	2.68	3.69	4.42	5.21	5.64	6.12	6.67	7.30	8.06	8.96	8.96	8.96	8.96	8.96
CCC/C	20.93	37.70	47.67	58.14	58.14	58.14	58.14	58.14	58.14	58.14	58.14	58.14	58.14	58.14	58.14
Investment grade	0.03	0.08	0.11	0.16	0.19	0.27	0.34	0.39	0.44	0.49	0.53	0.60	0.66	0.74	0.82
Speculative grade	1.46	2.52	3.34	4.11	4.93	5.06	5.20	5.35	5.53	5.73	5.97	5.97	5.97	5.97	5.97
All rated	0.14	0.27	0.36	0.46	0.55	0.63	0.70	0.76	0.82	0.87	0.93	0.99	1.06	1.13	1.20
Emerging and frontier markets
AAA	--	--	--	--	--	--	--	--	--	--	--	--	--	--	--
AA	--	--	--	--	--	--	--	--	--	--	--	--	--	--	--
A	--	--	--	--	--	--	--	--	--	--	--	--	--	--	--
BBB	0.11	0.25	0.43	0.66	0.87	0.98	1.07	1.11	1.16	1.22	1.28	1.35	1.43	1.52	1.63
BB	0.44	0.93	1.41	1.93	2.36	2.77	3.12	3.28	3.40	3.47	3.54	3.62	3.62	3.62	3.62
B	1.78	3.41	4.61	5.60	6.40	7.15	7.97	8.93	9.84	10.75	11.67	12.38	12.95	13.45	13.88
CCC/C	5.84	7.40	8.24	9.14	10.49	11.40	11.87	12.82	13.85	15.01	15.01	16.48	18.78	20.37	21.22
Investment grade	0.07	0.16	0.28	0.42	0.56	0.63	0.69	0.72	0.75	0.79	0.83	0.88	0.93	0.99	1.07
Speculative grade	1.26	2.29	3.10	3.83	4.46	5.04	5.59	6.13	6.64	7.13	7.55	7.98	8.35	8.66	8.89
All rated	0.65	1.20	1.66	2.10	2.49	2.82	3.12	3.42	3.69	3.96	4.20	4.45	4.68	4.88	5.04
Includes the bank, nonbank financial institution, and insurance sectors. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Gini Ratios And Lorenz Curves

A quantitative analysis of the performance of S&P Global Ratings' credit ratings shows that ratings on financial services issuers correlate with the level of default risk across several time horizons. To measure ratings performance, we plotted the cumulative share of defaulters against the cumulative share of issuers by rating in a Lorenz curve to visually render the accuracy of the rank ordering (see Appendix III). Over the long term, the global weighted-average one-year Gini coefficient for banks is 82.39%, followed by the 74.78% Gini coefficient for NBFIs and the 74.45% Gini coefficient for insurance companies (see table 16).

Table 16

Global average Gini coefficients for financials by sector, 1981-2023
		--Time horizon--
Sector		One-year	Three-year	Five-year	Seven-year
Bank	Weighted average	82.39	75.40	71.56	68.23
	Average	87.42	82.55	77.82	72.91
	Standard deviation	(15.17)	(15.61)	(18.17)	(21.20)
NBFI	Weighted average	74.78	66.26	61.43	57.68
	Average	81.78	74.85	67.24	61.69
	Standard deviation	(19.17)	(18.77)	(24.15)	(24.29)
Insurance	Weighted average	74.45	56.89	44.48	40.28
	Average	81.58	73.03	61.26	55.73
	Standard deviation	(22.75)	(23.24)	(25.73)	(27.52)
Note: The numbers in parentheses are standard deviations. NBFI--Nonbank financial institutions. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

As expected, the Gini coefficients decline over time because, with longer time horizons, there's greater opportunity for credit degradation among higher-rated entities. For example, in the one-year global Lorenz curve, 83.03% of defaults occurred in the speculative-grade rating categories, while speculative-grade ratings constituted only 18.3% of all financial services ratings. In the five-year Lorenz curve, speculative-grade issuers constituted 65.60% of defaulters and only 17.31% of the entire sample. If the rank ordering of ratings had little predictive value, the cumulative share of defaulting corporate entities and the cumulative share of all entities at each rating would be nearly the same, producing a Gini ratio of zero (see charts 12-14).

The quick deterioration of Gini ratios also reflects issuers' vulnerability to a loss of confidence, even among highly rated entities (as also shown in the path to default in chart 3).

Among the three financial services sectors, insurance companies exhibit Gini ratios that are lower over three or more years, reflecting, in part, the smaller number of insurance companies that eventually defaulted.

Appendix I: Detailed Default And Transition Statistics By Financial Services Sector

Bank rating action trends and ratings performance

Table 17

Summary of annual bank rating action trends (%)
	Issuers as of Jan. 1 (no.)	Upgrades	Downgrades*	Defaults	Withdrawn ratings	Changed ratings	Unchanged ratings	Downgrade-to-upgrade ratio
1981	55	9.09	9.09	0.00	0.00	18.18	81.82	1.00
1982	58	5.17	18.97	0.00	0.00	24.14	75.86	3.67
1983	82	7.32	14.63	0.00	4.88	26.83	73.17	2.00
1984	98	4.08	26.53	0.00	1.02	31.63	68.37	6.50
1985	116	7.76	7.76	0.00	1.72	17.24	82.76	1.00
1986	202	5.45	11.39	0.00	3.47	20.30	79.70	2.09
1987	223	5.38	18.83	0.00	3.59	27.80	72.20	3.50
1988	260	13.85	11.92	1.92	4.23	31.92	68.08	0.86
1989	282	7.09	13.48	1.77	3.55	25.89	74.11	1.90
1990	304	1.64	32.89	1.32	2.30	38.16	61.84	20.00
1991	315	2.86	25.71	2.22	3.81	34.60	65.40	9.00
1992	324	6.48	11.73	2.16	2.78	23.15	76.85	1.81
1993	342	12.87	10.23	0.29	4.09	27.49	72.51	0.80
1994	365	8.49	8.49	0.00	3.84	20.82	79.18	1.00
1995	442	5.88	10.86	0.23	3.39	20.36	79.64	1.85
1996	478	7.11	6.69	0.00	7.74	21.55	78.45	0.94
1997	522	5.36	7.47	0.00	7.66	20.50	79.50	1.39
1998	591	5.75	16.07	1.35	14.72	37.90	62.10	2.79
1999	579	5.01	8.12	0.17	8.64	21.93	78.07	1.62
2000	626	8.95	6.23	0.00	6.07	21.25	78.75	0.70
2001	664	5.12	6.17	0.90	8.58	20.78	79.22	1.21
2002	681	7.20	13.66	0.73	5.87	27.46	72.54	1.90
2003	714	9.38	4.20	0.00	5.32	18.91	81.09	0.45
2004	761	12.61	2.50	0.13	6.57	21.81	78.19	0.20
2005	783	21.84	4.21	0.00	8.94	34.99	65.01	0.19
2006	795	23.52	0.88	0.00	7.30	31.70	68.30	0.04
2007	829	23.52	3.74	0.00	5.79	33.05	66.95	0.16
2008	861	7.43	15.68	0.93	5.11	29.15	70.85	2.11
2009	868	2.30	24.19	1.38	8.87	36.75	63.25	10.50
2010	829	7.36	9.41	0.24	6.76	23.76	76.24	1.28
2011	811	17.63	25.89	0.12	6.41	50.06	49.94	1.47
2012	819	4.52	17.70	0.12	7.08	29.43	70.57	3.92
2013	836	6.46	13.52	0.24	4.19	24.40	75.60	2.09
2014	866	6.81	12.82	0.12	4.04	23.79	76.21	1.88
2015	893	5.82	17.13	1.23	5.60	29.79	70.21	2.94
2016	888	7.21	11.71	0.79	6.87	26.58	73.42	1.63
2017	856	11.10	9.46	0.23	7.94	28.74	71.26	0.85
2018	834	10.55	7.79	0.12	4.08	22.54	77.46	0.74
2019	866	9.47	2.66	0.46	5.31	17.90	82.10	0.28
2020	860	1.16	12.33	0.23	4.77	18.49	81.51	10.60
2021	843	7.59	4.74	0.24	4.27	16.84	83.16	0.63
2022	827	7.74	3.26	0.36	7.62	18.98	81.02	0.42
2023	791	12.26	5.44	0.38	4.30	22.38	77.62	0.44
Weighted average		9.09	10.70	0.45	6.06	26.30	73.70	2.27
Average		8.47	11.77	0.47	5.33	26.04	73.96	2.57
Median		7.21	10.86	0.23	5.11	24.14	75.86	1.47
Standard deviation		5.16	7.31	0.65	2.70	7.00	7.00	3.70
Minimum		1.16	0.88	0.00	0.00	16.84	49.94	0.04
Maximum		23.52	32.89	2.22	14.72	50.06	83.16	20.00
This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. *Excludes downgrades to 'D', which are shown separately in the "Defaults" column. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 18

Global 2023 one-year transition rates for banks by region (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
Global
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	92.31	1.92	0.00	0.00	0.00	0.00	0.00	5.77
A	0.00	0.37	96.70	1.10	0.00	0.00	0.00	0.00	1.83
BBB	0.00	0.00	2.76	90.16	0.00	0.39	0.00	0.79	5.91
BB	0.00	0.00	0.00	2.68	89.29	0.00	0.00	0.00	8.04
B	0.00	0.00	0.00	0.00	9.52	85.71	2.38	1.19	1.19
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	93.33	0.00	6.67
U.S. and tax havens
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	50.00	12.50	0.00	0.00	0.00	0.00	0.00	37.50
A	0.00	0.00	91.11	6.67	0.00	0.00	0.00	0.00	2.22
BBB	0.00	0.00	0.00	88.52	0.00	0.00	0.00	3.28	8.20
BB	0.00	0.00	0.00	0.00	87.50	0.00	0.00	0.00	12.50
B	0.00	0.00	0.00	0.00	0.00	100.00	0.00	0.00	0.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Europe
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.84	97.48	0.00	0.00	0.00	0.00	0.00	1.68
BBB	0.00	0.00	4.35	85.51	0.00	0.00	0.00	0.00	10.14
BB	0.00	0.00	0.00	10.53	78.95	0.00	0.00	0.00	10.53
B	0.00	0.00	0.00	0.00	10.00	80.00	0.00	0.00	10.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Emerging and frontier markets
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	98.04	0.00	0.00	0.00	0.00	0.00	1.96
BBB	0.00	0.00	4.12	94.85	0.00	1.03	0.00	0.00	0.00
BB	0.00	0.00	0.00	1.16	91.86	0.00	0.00	0.00	6.98
B	0.00	0.00	0.00	0.00	10.00	85.71	2.86	1.43	0.00
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	93.33	0.00	6.67
Other developed
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	98.28	0.00	0.00	0.00	0.00	0.00	1.72
BBB	0.00	0.00	0.00	90.32	0.00	0.00	0.00	0.00	9.68
BB	0.00	0.00	0.00	0.00	75.00	0.00	0.00	0.00	25.00
B	0.00	0.00	0.00	0.00	0.00	100.00	0.00	0.00	0.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
N/A--Not applicable. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 19

Global average transition rates for banks, 1981-2023 (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One-year
AAA	83.37	10.88	0.82	0.00	0.21	0.00	0.00	0.00	4.72
	(15.04)	(12.87)	(2.38)	(0.00)	(1.17)	(0.00)	(0.00)	(0.00)	(6.64)
AA	0.26	86.83	8.85	0.34	0.00	0.00	0.00	0.00	3.71
	(0.59)	(7.79)	(7.45)	(0.83)	(0.00)	(0.00)	(0.00)	(0.00)	(2.63)
A	0.02	1.93	89.07	4.00	0.21	0.04	0.00	0.03	4.68
	(0.23)	(1.95)	(6.12)	(4.10)	(0.75)	(0.15)	(0.00)	(0.13)	(2.85)
BBB	0.00	0.20	3.92	85.40	3.29	0.37	0.02	0.15	6.65
	(0.00)	(0.64)	(3.94)	(6.45)	(3.47)	(1.31)	(0.09)	(0.49)	(2.49)
BB	0.00	0.10	0.07	5.87	78.62	4.90	0.52	0.52	9.38
	(0.00)	(0.40)	(0.93)	(4.67)	(8.97)	(4.81)	(1.75)	(1.56)	(4.97)
B	0.00	0.00	0.05	0.23	6.42	78.94	3.14	2.45	8.78
	(0.00)	(0.00)	(0.63)	(0.76)	(5.70)	(9.14)	(5.13)	(4.76)	(4.32)
CCC/C	0.00	0.00	0.00	0.00	0.69	19.93	53.61	11.00	14.78
	(0.00)	(0.00)	(0.00)	(0.00)	(4.04)	(19.43)	(26.56)	(16.62)	(15.44)
Three-year
AAA	58.35	24.33	2.47	1.24	0.21	0.00	0.00	0.00	13.40
	(18.80)	(15.59)	(5.66)	(3.01)	(0.96)	(0.00)	(0.00)	(0.00)	(12.08)
AA	0.65	65.76	21.03	1.68	0.14	0.08	0.00	0.03	10.64
	(0.85)	(12.34)	(9.85)	(2.15)	(0.45)	(0.45)	(0.00)	(0.21)	(5.26)
A	0.02	4.74	71.47	8.53	1.26	0.26	0.06	0.18	13.49
	(0.27)	(4.10)	(10.12)	(4.79)	(2.24)	(0.66)	(0.26)	(0.45)	(5.51)
BBB	0.00	0.53	9.62	64.31	5.61	0.82	0.27	0.70	18.14
	(0.00)	(1.27)	(7.63)	(10.75)	(4.60)	(1.74)	(0.92)	(1.47)	(6.02)
BB	0.00	0.15	0.34	13.66	49.92	8.82	0.45	2.04	24.60
	(0.00)	(0.66)	(2.27)	(7.56)	(12.04)	(6.13)	(1.76)	(4.52)	(7.65)
B	0.00	0.00	0.00	0.75	13.08	52.01	4.83	6.44	22.89
	(0.00)	(0.00)	(0.00)	(2.01)	(9.58)	(12.68)	(4.95)	(9.53)	(8.29)
CCC/C	0.00	0.00	0.00	0.00	0.77	33.46	13.85	18.08	33.85
	(0.00)	(0.00)	(0.00)	(0.00)	(4.27)	(23.22)	(17.81)	(19.20)	(20.15)
Five-year
AAA	41.41	26.92	6.63	2.07	0.00	0.21	0.00	0.00	22.77
	(18.77)	(13.85)	(8.22)	(3.70)	(0.00)	(1.17)	(0.00)	(0.00)	(17.58)
AA	0.75	51.51	26.93	3.32	0.31	0.11	0.03	0.17	16.88
	(0.90)	(13.27)	(9.33)	(2.93)	(0.76)	(0.74)	(0.31)	(1.08)	(6.46)
A	0.01	6.18	58.78	10.81	2.01	0.33	0.06	0.36	21.46
	(0.06)	(4.75)	(11.06)	(5.02)	(2.65)	(0.63)	(0.20)	(0.67)	(6.62)
BBB	0.00	0.92	12.54	50.04	6.14	1.14	0.35	1.33	27.54
	(0.00)	(1.73)	(8.26)	(11.82)	(4.99)	(1.33)	(0.88)	(2.14)	(7.97)
BB	0.00	0.04	1.25	15.41	33.21	8.73	0.46	3.72	37.18
	(0.00)	(0.24)	(2.98)	(7.64)	(10.91)	(6.33)	(2.03)	(6.68)	(8.76)
B	0.00	0.11	0.00	1.93	14.03	37.14	4.09	9.37	33.33
	(0.00)	(0.98)	(0.00)	(3.45)	(9.37)	(13.44)	(4.03)	(11.57)	(10.58)
CCC/C	0.00	0.00	0.00	0.00	2.47	27.16	4.94	22.63	42.80
	(0.00)	(0.00)	(0.00)	(0.00)	(6.31)	(18.40)	(9.73)	(21.00)	(20.88)
10-year
AAA	17.36	24.90	14.23	4.81	0.00	0.00	0.00	0.00	38.70
	(10.57)	(10.55)	(8.36)	(6.80)	(0.00)	(0.00)	(0.00)	(0.00)	(16.93)
AA	0.31	31.09	30.75	5.51	0.21	0.12	0.00	0.43	31.58
	(0.57)	(10.72)	(7.40)	(3.90)	(0.55)	(0.27)	(0.00)	(2.08)	(6.38)
A	0.00	7.16	38.84	11.91	2.05	0.54	0.00	0.86	38.65
	(0.00)	(4.05)	(8.01)	(5.48)	(2.40)	(0.71)	(0.00)	(1.16)	(6.56)
BBB	0.00	1.37	12.35	29.03	5.58	1.35	0.59	3.03	46.71
	(0.00)	(2.63)	(5.85)	(9.77)	(4.07)	(0.67)	(1.07)	(2.75)	(9.00)
BB	0.00	0.00	3.17	14.12	14.36	8.80	0.18	6.46	52.90
	(0.00)	(0.00)	(3.60)	(8.42)	(10.40)	(5.97)	(0.35)	(9.72)	(9.39)
B	0.00	0.00	0.26	3.53	11.18	18.06	2.06	14.79	50.13
	(0.00)	(0.00)	(0.98)	(4.67)	(5.33)	(10.53)	(2.52)	(14.41)	(11.57)
CCC/C	0.00	0.00	0.00	0.53	4.81	13.90	5.35	25.13	50.27
	(0.00)	(0.00)	(0.00)	(2.18)	(11.52)	(14.76)	(9.59)	(23.01)	(21.77)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 20

Average one-year transition rates for global banks by rating modifier, 1981-2023 (%)
Rating	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C	D	NR
AAA	83.37	7.80	2.67	0.41	0.21	0.41	0.21	0.00	0.00	0.00	0.21	0.00	0.00	0.00	0.00	0.00	0.00	0.00	4.72
	(15.0)	(9.4)	(6.5)	(1.3)	(1.2)	(1.9)	(1.0)	(0.0)	(0.0)	(0.0)	(1.2)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(6.6)
AA+	1.88	76.24	14.59	3.29	0.71	0.71	0.24	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.35
	(4.1)	(19.6)	(16.3)	(7.6)	(2.4)	(2.5)	(1.3)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(5.0)
AA	0.17	1.81	76.70	11.82	3.88	1.38	0.17	0.43	0.00	0.17	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.45
	(0.9)	(4.7)	(18.6)	(13.8)	(6.6)	(2.9)	(0.7)	(1.4)	(0.0)	(0.9)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(4.0)
AA-	0.00	0.00	3.80	79.79	9.18	2.40	0.45	0.18	0.09	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	4.11
	(0.0)	(0.0)	(5.6)	(10.9)	(7.8)	(4.4)	(1.1)	(1.1)	(0.5)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(3.0)
A+	0.00	0.07	0.33	4.88	78.47	9.20	1.50	0.29	0.37	0.11	0.04	0.11	0.00	0.04	0.00	0.00	0.00	0.00	4.58
	(0.0)	(0.4)	(0.7)	(5.5)	(12.4)	(8.6)	(2.6)	(0.6)	(0.9)	(0.7)	(0.3)	(0.9)	(0.0)	(0.3)	(0.0)	(0.0)	(0.0)	(0.0)	(3.5)
A	0.00	0.03	0.06	0.47	6.83	77.55	7.21	2.12	0.47	0.26	0.03	0.00	0.00	0.03	0.03	0.00	0.00	0.06	4.85
	(0.0)	(0.3)	(0.4)	(1.3)	(6.5)	(9.7)	(5.8)	(3.2)	(1.1)	(0.8)	(0.1)	(0.0)	(0.0)	(0.2)	(0.2)	(0.0)	(0.0)	(0.2)	(3.9)
A-	0.07	0.00	0.07	0.25	0.47	9.14	76.30	6.02	1.65	0.90	0.25	0.11	0.14	0.04	0.00	0.00	0.00	0.04	4.55
	(0.9)	(0.0)	(0.3)	(0.8)	(0.9)	(8.0)	(11.6)	(5.6)	(3.0)	(2.2)	(1.0)	(0.5)	(0.5)	(0.2)	(0.0)	(0.0)	(0.0)	(0.2)	(3.0)
BBB+	0.00	0.00	0.08	0.16	0.20	0.64	7.63	76.05	6.99	1.35	0.52	0.32	0.08	0.12	0.08	0.04	0.04	0.12	5.60
	(0.0)	(0.0)	(0.6)	(0.5)	(0.8)	(2.4)	(6.6)	(10.8)	(5.9)	(2.9)	(1.5)	(1.4)	(0.6)	(1.7)	(0.4)	(0.2)	(0.2)	(0.4)	(3.9)
BBB	0.00	0.04	0.09	0.09	0.00	0.27	1.21	9.75	74.84	5.35	1.35	0.58	0.27	0.18	0.09	0.00	0.00	0.18	5.71
	(0.0)	(0.8)	(0.5)	(0.5)	(0.0)	(1.5)	(2.6)	(7.4)	(11.2)	(6.8)	(2.4)	(1.3)	(1.3)	(0.9)	(0.7)	(0.0)	(0.0)	(0.8)	(3.3)
BBB-	0.00	0.06	0.00	0.06	0.06	0.23	0.23	0.96	9.86	70.29	5.90	1.70	0.45	0.45	0.06	0.17	0.00	0.17	9.35
	(0.0)	(0.4)	(0.0)	(0.6)	(0.8)	(0.7)	(1.0)	(2.1)	(7.3)	(11.1)	(6.8)	(3.2)	(1.1)	(2.1)	(0.7)	(2.4)	(0.0)	(0.7)	(4.9)
BB+	0.00	0.00	0.00	0.21	0.00	0.10	0.00	0.52	1.35	13.42	60.77	8.22	2.19	0.83	0.42	0.42	0.62	0.52	10.41
	(0.0)	(0.0)	(0.0)	(1.0)	(0.0)	(0.8)	(0.0)	(1.6)	(4.7)	(8.9)	(12.2)	(9.9)	(3.4)	(1.7)	(1.3)	(1.1)	(2.9)	(1.7)	(6.8)
BB	0.00	0.00	0.00	0.11	0.00	0.11	0.00	0.11	0.11	1.58	11.43	64.82	8.48	1.58	0.79	0.34	0.57	0.34	9.62
	(0.0)	(0.0)	(0.0)	(0.7)	(0.0)	(3.4)	(0.0)	(0.7)	(0.7)	(3.7)	(8.6)	(13.9)	(10.1)	(4.0)	(3.3)	(1.8)	(2.3)	(1.4)	(7.2)
BB-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.19	0.39	2.52	9.40	68.41	6.59	2.42	0.78	0.39	0.68	8.24
	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.8)	(3.2)	(4.1)	(12.6)	(17.4)	(7.0)	(4.1)	(4.0)	(1.8)	(3.9)	(7.4)
B+	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.12	0.25	0.62	1.86	12.41	62.66	7.07	2.85	0.74	1.99	9.43
	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.6)	(1.9)	(2.5)	(3.9)	(9.9)	(13.4)	(7.3)	(4.8)	(3.1)	(4.2)	(6.9)
B	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.14	0.00	0.14	0.28	0.14	1.69	11.14	62.34	11.28	2.12	1.69	9.03
	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.7)	(0.0)	(0.9)	(1.5)	(2.7)	(4.1)	(10.8)	(14.2)	(11.2)	(5.5)	(7.2)	(7.0)
B-	0.00	0.00	0.00	0.00	0.00	0.15	0.00	0.00	0.00	0.00	0.00	0.31	0.31	3.08	13.85	63.54	7.23	3.85	7.69
	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(2.3)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(1.8)	(1.1)	(5.9)	(10.4)	(15.5)	(12.7)	(7.5)	(5.9)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.34	0.00	0.34	1.37	1.37	17.18	53.61	11.00	14.78
	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)	(3.4)	(0.0)	(2.2)	(4.7)	(4.8)	(19.0)	(26.6)	(16.6)	(15.4)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 21

Average one-year transition rates by major region for banks, 1981-2023 (%)
Rating	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	74.19	15.05	2.15	0.00	1.08	0.00	0.00	0.00	7.53
	(26.83)	(21.55)	(4.13)	(0.00)	(6.03)	(0.00)	(0.00)	(0.00)	(15.86)
AA	0.08	85.43	9.08	0.57	0.00	0.00	0.00	0.00	4.83
	(0.41)	(12.12)	(9.32)	(1.44)	(0.00)	(0.00)	(0.00)	(0.00)	(5.45)
A	0.03	2.12	88.22	4.08	0.36	0.10	0.00	0.03	5.06
	(0.38)	(2.85)	(8.08)	(5.99)	(1.21)	(0.31)	(0.00)	(0.22)	(4.88)
BBB	0.00	0.31	3.51	85.42	2.42	0.61	0.00	0.40	7.33
	(0.00)	(0.80)	(3.77)	(7.86)	(3.71)	(2.13)	(0.00)	(1.32)	(4.30)
BB	0.00	0.58	0.39	7.93	70.79	6.77	1.55	0.77	11.22
	(0.00)	(2.47)	(2.18)	(8.29)	(15.26)	(9.07)	(3.51)	(2.24)	(9.82)
B	0.00	0.00	0.45	0.45	8.18	64.09	8.64	6.36	11.82
	(0.00)	(0.00)	(2.00)	(2.11)	(12.37)	(22.19)	(11.60)	(10.79)	(18.33)
CCC/C	0.00	0.00	0.00	0.00	3.92	7.84	39.22	27.45	21.57
	(0.00)	(0.00)	(0.00)	(0.00)	(9.10)	(16.82)	(33.41)	(26.12)	(22.12)
Europe
AAA	85.85	9.12	0.31	0.00	0.00	0.00	0.00	0.00	4.72
	(15.66)	(12.26)	(2.29)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(8.87)
AA	0.29	86.16	10.05	0.34	0.00	0.00	0.00	0.00	3.16
	(1.29)	(10.17)	(9.96)	(1.03)	(0.00)	(0.00)	(0.00)	(0.00)	(3.21)
A	0.03	2.20	87.77	4.20	0.20	0.00	0.00	0.06	5.54
	(0.13)	(2.80)	(7.55)	(5.29)	(0.79)	(0.00)	(0.00)	(0.18)	(3.35)
BBB	0.00	0.20	5.80	80.03	4.25	0.13	0.07	0.00	9.51
	(0.00)	(2.74)	(4.38)	(10.77)	(7.00)	(0.51)	(0.41)	(0.00)	(5.65)
BB	0.00	0.00	0.00	8.40	71.31	4.51	0.82	0.00	14.96
	(0.00)	(0.00)	(0.00)	(8.58)	(15.56)	(6.52)	(5.03)	(0.00)	(10.72)
B	0.00	0.00	0.00	2.55	12.10	66.88	0.64	2.55	15.29
	(0.00)	(0.00)	(0.00)	(6.45)	(13.22)	(21.59)	(4.00)	(7.34)	(19.78)
CCC/C	0.00	0.00	0.00	0.00	0.00	22.22	59.26	14.81	3.70
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(40.46)	(49.20)	(37.98)	(20.19)
Emerging and frontier markets
AAA	92.31	0.00	0.00	0.00	0.00	0.00	0.00	0.00	7.69
	27.74	0.00	0.00	0.00	0.00	0.00	0.00	0.00	27.74
AA	0.00	88.89	8.89	0.00	0.00	0.00	0.00	0.00	2.22
	(0.00)	(16.85)	(16.68)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(6.85)
A	0.00	1.02	92.84	4.20	0.00	0.00	0.00	0.00	1.93
	(0.00)	(1.78)	(7.63)	(7.52)	(0.00)	(0.00)	(0.00)	(0.00)	(1.89)
BBB	0.00	0.05	1.75	89.10	4.48	0.24	0.00	0.05	4.33
	(0.00)	(0.28)	(3.26)	(7.59)	(5.87)	(1.83)	(0.00)	(0.22)	(2.89)
BB	0.00	0.00	0.00	4.27	83.02	4.81	0.16	0.53	7.21
	(0.00)	(0.00)	(0.00)	(4.49)	(7.84)	(4.66)	(1.07)	(2.31)	(5.41)
B	0.00	0.00	0.00	0.11	5.75	81.71	2.57	1.92	7.94
	(0.00)	(0.00)	(0.00)	(0.43)	(6.30)	(6.90)	(3.71)	(3.80)	(4.40)
CCC/C	0.00	0.00	0.00	0.00	0.00	22.75	56.40	6.16	14.69
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(18.24)	(24.97)	(10.99)	(15.43)
Other developed
AAA	82.54	15.87	1.59	0.00	0.00	0.00	0.00	0.00	0.00
	(33.91)	(32.26)	(12.72)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
AA	0.54	90.44	5.65	0.00	0.00	0.00	0.00	0.00	3.36
	(2.65)	(8.04)	(6.60)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.91)
A	0.00	1.41	91.47	3.36	0.07	0.07	0.00	0.00	3.63
	(0.00)	(2.59)	(8.57)	(7.02)	(0.43)	(0.41)	(0.00)	(0.00)	(3.49)
BBB	0.00	0.26	7.05	85.51	1.28	0.38	0.00	0.00	5.51
	(0.00)	(2.65)	(12.22)	(12.75)	(5.20)	(1.59)	(0.00)	(0.00)	(5.44)
BB	0.00	0.00	0.00	11.20	72.80	0.80	0.00	0.80	14.40
	(0.00)	(0.00)	(0.00)	(14.97)	(24.46)	(3.35)	(0.00)	(6.40)	(15.06)
B	0.00	0.00	0.00	0.00	20.00	63.33	3.33	0.00	13.33
	(0.00)	(0.00)	(0.00)	(0.00)	(30.40)	(38.08)	(10.26)	(0.00)	(29.42)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	50.00	50.00	0.00
	0.00	0.00	0.00	0.00	0.00	0.00	70.71	70.71	0.00
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 22

Average cumulative default rates for global banks, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	0.00	0.03	0.08	0.17	0.25	0.31	0.37	0.37	0.40	0.40	0.40	0.40	0.40	0.40
A	0.03	0.09	0.18	0.25	0.34	0.43	0.51	0.58	0.66	0.73	0.78	0.83	0.89	0.94	1.00
BBB	0.15	0.44	0.74	1.09	1.35	1.64	1.93	2.19	2.44	2.69	3.00	3.34	3.68	4.04	4.43
BB	0.52	1.21	1.97	2.68	3.39	4.06	4.35	4.45	4.50	4.63	4.69	4.77	4.77	4.77	4.77
B	2.45	4.71	6.22	7.55	8.70	9.56	10.50	11.51	12.63	13.59	14.54	15.17	15.63	16.13	16.55
CCC/C	11.00	15.01	17.71	20.61	22.26	23.10	23.54	24.46	24.95	25.49	25.49	26.73	28.62	29.91	30.58
Investment grade	0.07	0.19	0.33	0.48	0.62	0.77	0.91	1.03	1.14	1.25	1.36	1.47	1.58	1.70	1.83
Speculative grade	1.88	3.38	4.55	5.63	6.56	7.32	7.86	8.37	8.87	9.34	9.74	10.10	10.41	10.69	10.90
All rated	0.45	0.86	1.22	1.56	1.86	2.13	2.35	2.54	2.72	2.89	3.05	3.20	3.34	3.48	3.62
Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 23

Average cumulative default rates for global banks by rating modifier, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA+	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	0.00	0.00	0.00	0.09	0.18	0.36	0.45	0.45	0.54	0.54	0.54	0.54	0.54	0.54
AA-	0.00	0.00	0.05	0.14	0.24	0.34	0.34	0.39	0.39	0.39	0.39	0.39	0.39	0.39	0.39
A+	0.00	0.00	0.08	0.12	0.16	0.16	0.16	0.21	0.25	0.30	0.35	0.40	0.46	0.52	0.64
A	0.06	0.15	0.21	0.28	0.31	0.45	0.55	0.59	0.67	0.71	0.71	0.75	0.80	0.85	0.85
A-	0.04	0.11	0.22	0.34	0.55	0.68	0.81	0.95	1.04	1.20	1.30	1.36	1.41	1.47	1.54
BBB+	0.12	0.32	0.41	0.55	0.59	0.70	0.96	1.19	1.44	1.64	1.99	2.36	2.84	3.26	3.62
BBB	0.18	0.42	0.56	0.88	1.15	1.61	1.86	2.11	2.38	2.59	2.82	3.06	3.15	3.34	3.54
BBB-	0.17	0.64	1.43	2.13	2.66	3.01	3.37	3.67	3.92	4.27	4.65	5.06	5.51	6.00	6.67
BB+	0.52	0.74	1.41	1.87	2.35	2.85	2.98	2.98	2.98	2.98	2.98	2.98	2.98	2.98	2.98
BB	0.34	1.15	1.63	2.00	2.77	3.18	3.18	3.34	3.34	3.34	3.34	3.56	3.56	3.56	3.56
BB-	0.68	1.71	2.81	4.11	5.02	6.14	6.89	7.05	7.23	7.62	7.84	7.84	7.84	7.84	7.84
B+	1.99	3.93	5.43	6.15	6.76	7.24	7.77	8.15	8.56	8.56	8.56	8.56	8.56	8.56	8.56
B	1.69	3.59	4.35	5.30	6.00	6.77	7.80	9.60	11.53	13.45	13.75	13.75	13.75	13.75	13.75
B-	3.85	6.91	9.27	11.80	14.13	15.57	16.92	17.92	19.05	20.26	23.24	25.47	27.11	28.92	30.50
CCC/C	11.00	15.01	17.71	20.61	22.26	23.10	23.54	24.46	24.95	25.49	25.49	26.73	28.62	29.91	30.58
Investment grade	0.07	0.19	0.33	0.48	0.62	0.77	0.91	1.03	1.14	1.25	1.36	1.47	1.58	1.70	1.83
Speculative grade	1.88	3.38	4.55	5.63	6.56	7.32	7.86	8.37	8.87	9.34	9.74	10.10	10.41	10.69	10.90
All rated	0.45	0.86	1.22	1.56	1.86	2.13	2.35	2.54	2.72	2.89	3.05	3.20	3.34	3.48	3.62
Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 24

Time to default from original rating for global bank defaulters, 1981-2023
Original rating	Defaults	Average time from original rating (years)*	Median time from original rating (years)	Standard deviation of time from original rating (years)
AAA	--	--	--	--
AA	5	12.10	7.81	9.34
A	8	12.24	6.37	10.08
BBB	24	9.50	8.59	6.23
BB	31	7.18	5.49	6.67
B	50	3.79	2.40	4.09
CCC/C	18	4.51	1.88	5.29
*Or Dec. 31, 1980, whichever is later. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

NBFI rating action trends and ratings performance

Table 25

Summary of annual NBFI rating action trends (%)
	Issuers as of Jan. 1 (no.)	Upgrades	Downgrades*	Defaults	Withdrawn ratings	Changed ratings	Unchanged ratings	Downgrade-to-upgrade ratio
1981	32	12.50	18.75	0.00	6.25	37.50	62.50	1.50
1982	32	9.38	21.88	3.13	6.25	40.63	59.38	2.33
1983	33	0.00	12.12	0.00	6.06	18.18	81.82	N/A
1984	37	10.81	10.81	0.00	0.00	21.62	78.38	1.00
1985	39	7.69	5.13	0.00	10.26	23.08	76.92	0.67
1986	43	11.63	11.63	0.00	6.98	30.23	69.77	1.00
1987	47	12.77	19.15	0.00	0.00	31.91	68.09	1.50
1988	49	8.16	16.33	0.00	8.16	32.65	67.35	2.00
1989	51	7.84	7.84	7.84	1.96	25.49	74.51	1.00
1990	53	5.66	15.09	0.00	1.89	22.64	77.36	2.67
1991	58	3.45	15.52	0.00	1.72	20.69	79.31	4.50
1992	59	6.78	23.73	0.00	3.39	33.90	66.10	3.50
1993	67	7.46	7.46	0.00	1.49	16.42	83.58	1.00
1994	87	4.60	16.09	0.00	6.90	27.59	72.41	3.50
1995	106	6.60	11.32	1.89	0.94	20.75	79.25	1.71
1996	127	5.51	2.36	0.00	8.66	16.54	83.46	0.43
1997	147	6.12	6.80	1.36	6.80	21.09	78.91	1.11
1998	166	3.01	13.86	1.81	9.04	27.71	72.29	4.60
1999	159	4.40	7.55	0.63	16.98	29.56	70.44	1.71
2000	168	8.33	8.93	0.60	8.33	26.19	73.81	1.07
2001	174	4.02	9.20	3.45	7.47	24.14	75.86	2.29
2002	197	8.12	13.20	0.51	5.58	27.41	72.59	1.63
2003	216	6.02	6.48	1.39	12.50	26.39	73.61	1.08
2004	219	5.02	4.57	0.00	9.59	19.18	80.82	0.91
2005	224	12.50	4.02	0.45	8.93	25.89	74.11	0.32
2006	238	14.71	0.84	0.00	13.87	29.41	70.59	0.06
2007	264	14.77	8.33	1.14	6.06	30.30	69.70	0.56
2008	302	9.60	15.89	2.98	9.27	37.75	62.25	1.66
2009	316	1.90	16.46	3.80	12.66	34.81	65.19	8.67
2010	310	6.13	5.16	2.90	9.35	23.55	76.45	0.84
2011	328	9.45	14.94	1.22	9.45	35.06	64.94	1.58
2012	340	4.12	8.24	0.88	10.00	23.24	76.76	2.00
2013	347	8.93	9.51	0.29	7.78	26.51	73.49	1.06
2014	387	8.27	10.34	0.52	11.11	30.23	69.77	1.25
2015	405	5.68	9.38	0.00	5.43	20.49	79.51	1.65
2016	438	7.53	7.99	1.83	6.85	24.20	75.80	1.06
2017	469	9.59	7.89	0.85	8.10	26.44	73.56	0.82
2018	473	7.82	7.19	1.06	9.30	25.37	74.63	0.92
2019	475	7.37	4.63	0.84	5.68	18.53	81.47	0.63
2020	483	1.04	17.81	0.41	6.63	25.88	74.12	17.20
2021	490	8.16	4.29	0.20	6.53	19.18	80.82	0.53
2022	514	3.70	7.78	0.58	7.78	19.84	80.16	2.11
2023	501	4.59	4.99	1.00	6.19	16.77	83.23	1.09
Weighted average		6.94	9.07	1.03	8.02	25.07	74.93	N/A
Average		7.25	10.50	1.01	7.17	25.93	74.07	N/A
Median		7.46	9.20	0.52	6.98	25.88	74.12	1.25
Standard deviation		3.39	5.39	1.50	3.64	6.09	6.09
Minimum		0.00	0.84	0.00	0.00	16.42	59.38	0.06
Maximum		14.77	23.73	7.84	16.98	40.63	83.58	N/A
This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. *Excludes downgrades to 'D', which are shown separately in the "Defaults" column. NBFI--Nonbank financial institution. N/A--Not applicable. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 26

Global 2023 one-year transition rates for NBFI by region (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
Global
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	95.35	4.65	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	95.24	0.95	0.00	0.00	0.00	0.00	3.81
BBB	0.00	0.00	2.23	93.85	0.56	0.56	0.00	0.00	2.79
BB	0.00	0.00	0.00	1.94	83.50	2.91	0.00	0.00	11.65
B	0.00	0.00	0.00	0.00	1.64	75.41	8.20	1.64	13.11
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	25.00	50.00	25.00
U.S. and tax havens
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00
BBB	0.00	0.00	1.67	95.00	0.00	0.00	0.00	0.00	3.33
BB	0.00	0.00	0.00	2.00	84.00	6.00	0.00	0.00	8.00
B	0.00	0.00	0.00	0.00	0.00	83.87	3.23	3.23	9.68
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	33.33	66.67	0.00
Europe
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	81.82	18.18	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	87.88	3.03	0.00	0.00	0.00	0.00	9.09
BBB	0.00	0.00	12.50	87.50	0.00	0.00	0.00	0.00	0.00
BB	0.00	0.00	0.00	0.00	84.62	0.00	0.00	0.00	15.38
B	0.00	0.00	0.00	0.00	0.00	70.00	10.00	0.00	20.00
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	50.00	50.00
Emerging and frontier markets
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	92.86	0.00	0.00	0.00	0.00	0.00	7.14
BBB	0.00	0.00	1.14	96.59	0.00	1.14	0.00	0.00	1.14
BB	0.00	0.00	0.00	3.33	80.00	0.00	0.00	0.00	16.67
B	0.00	0.00	0.00	0.00	6.67	60.00	13.33	0.00	20.00
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	33.33	33.33	33.33
Other developed
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00
BBB	0.00	0.00	0.00	80.00	6.67	0.00	0.00	0.00	13.33
BB	0.00	0.00	0.00	0.00	90.00	0.00	0.00	0.00	10.00
B	0.00	0.00	0.00	0.00	0.00	83.33	16.67	0.00	0.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
NBFI--Nonbank financial institutions. N/A--Not applicable. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 27

Global average transition rates for NBFI, 1981-2023 (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One-year
AAA	89.23	6.21	0.00	0.21	0.00	0.00	0.00	0.00	4.35
	(18.11)	(15.91)	(0.00)	(2.65)	(0.00)	(0.00)	(0.00)	(0.00)	(6.69)
AA	0.55	90.00	5.91	0.18	0.00	0.00	0.00	0.09	3.27
	(1.82)	(9.28)	(7.49)	(0.99)	(0.00)	(0.00)	(0.00)	(0.46)	(4.14)
A	0.09	1.12	89.11	3.67	0.00	0.04	0.04	0.13	5.79
	(0.49)	(3.00)	(6.07)	(3.32)	(0.00)	(0.31)	(0.32)	(0.72)	(4.89)
BBB	0.00	0.11	2.52	87.87	2.59	0.38	0.08	0.42	6.03
	(0.00)	(1.45)	(2.27)	(6.81)	(3.46)	(1.00)	(0.69)	(1.24)	(3.53)
BB	0.00	0.00	0.06	3.01	79.49	4.48	0.35	0.71	11.90
	(0.00)	(0.00)	(0.48)	(4.49)	(8.15)	(4.74)	(1.47)	(1.49)	(7.06)
B	0.00	0.00	0.00	0.47	5.54	72.99	4.06	2.50	14.44
	(0.00)	(0.00)	(0.00)	(1.85)	(4.43)	(9.14)	(4.09)	(4.84)	(6.97)
CCC/C	0.00	0.00	0.00	0.00	0.58	10.47	41.86	23.84	23.26
	(0.00)	(0.00)	(0.00)	(0.00)	(2.87)	(12.97)	(20.48)	(22.73)	(19.59)
Three-year
AAA	69.94	17.33	0.00	0.21	0.00	0.00	0.00	0.00	12.53
	(27.60)	(26.34)	(0.00)	(2.66)	(0.00)	(0.00)	(0.00)	(0.00)	(9.52)
AA	1.38	72.98	14.10	0.89	0.20	0.00	0.00	0.30	10.16
	(2.76)	(17.48)	(13.16)	(2.76)	(0.78)	(0.00)	(0.00)	(0.95)	(7.73)
A	0.29	2.52	70.98	9.18	0.24	0.19	0.10	0.52	15.98
	(0.89)	(4.23)	(11.68)	(5.22)	(1.06)	(0.59)	(0.76)	(1.47)	(10.45)
BBB	0.00	0.22	6.46	68.18	4.57	1.01	0.04	1.67	17.85
	(0.00)	(1.95)	(4.32)	(10.93)	(4.27)	(1.55)	(0.27)	(3.20)	(6.74)
BB	0.00	0.00	0.27	6.88	51.75	6.28	1.01	2.97	30.84
	(0.00)	(0.00)	(1.34)	(6.23)	(11.95)	(4.73)	(2.92)	(4.64)	(10.35)
B	0.00	0.00	0.00	1.66	10.49	43.09	4.11	8.57	32.08
	(0.00)	(0.00)	(0.00)	(4.08)	(6.27)	(10.73)	(3.38)	(8.46)	(10.43)
CCC/C	0.00	0.00	0.00	0.00	0.63	16.35	5.66	33.33	44.03
	(0.00)	(0.00)	(0.00)	(0.00)	(2.99)	(13.64)	(14.33)	(23.59)	(27.52)
Five-year
AAA	53.47	27.16	0.00	0.21	0.00	0.00	0.00	0.00	19.16
	(29.15)	(29.76)	(0.00)	(2.68)	(0.00)	(0.00)	(0.00)	(0.00)	(10.44)
AA	1.95	58.92	20.22	1.30	0.22	0.00	0.00	0.32	17.08
	(3.16)	(21.35)	(14.93)	(3.85)	(0.72)	(0.00)	(0.00)	(0.99)	(12.22)
A	0.42	3.12	58.15	11.69	0.63	0.32	0.16	1.11	24.39
	(1.16)	(3.29)	(12.65)	(5.37)	(1.99)	(0.76)	(0.81)	(2.06)	(12.72)
BBB	0.10	0.41	7.61	54.26	4.41	0.81	0.00	3.14	29.26
	(0.52)	(2.71)	(4.73)	(12.00)	(3.72)	(1.40)	(0.00)	(4.66)	(7.90)
BB	0.00	0.00	0.47	8.43	34.96	5.43	0.39	4.96	45.35
	(0.00)	(0.00)	(2.83)	(6.07)	(11.27)	(3.36)	(1.73)	(5.82)	(9.96)
B	0.00	0.00	0.00	2.10	11.01	27.63	2.80	11.91	44.54
	(0.00)	(0.00)	(0.00)	(5.89)	(6.06)	(9.96)	(3.08)	(9.52)	(13.01)
CCC/C	0.00	0.00	0.00	1.32	1.99	11.92	1.32	36.42	47.02
	(0.00)	(0.00)	(0.00)	(3.43)	(4.62)	(10.63)	(4.08)	(26.02)	(27.19)
10-year
AAA	25.38	43.60	0.00	0.00	0.00	0.00	0.00	0.00	31.02
	(23.88)	(30.59)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(15.66)
AA	2.79	30.69	26.73	3.52	0.00	0.15	0.00	0.73	35.39
	(4.37)	(18.84)	(14.62)	(5.75)	(0.00)	(0.96)	(0.00)	(1.66)	(16.54)
A	0.70	4.65	39.01	7.89	1.48	0.49	0.07	3.10	42.61
	(1.73)	(3.72)	(12.99)	(3.88)	(2.62)	(0.89)	(0.38)	(3.30)	(11.78)
BBB	0.23	0.62	6.80	32.30	2.86	1.47	0.00	7.03	48.69
	(0.80)	(4.05)	(5.36)	(12.12)	(2.33)	(1.83)	(0.00)	(6.81)	(7.52)
BB	0.00	0.00	0.85	11.99	13.08	3.27	0.24	7.99	62.59
	(0.00)	(0.00)	(2.92)	(6.43)	(7.34)	(4.69)	(0.98)	(6.78)	(10.73)
B	0.00	0.00	0.48	2.86	4.77	11.29	0.64	16.22	63.75
	(0.00)	(0.00)	(5.21)	(6.62)	(5.27)	(4.39)	(1.67)	(12.44)	(13.24)
CCC/C	0.00	0.00	0.00	2.70	2.70	1.80	0.90	33.33	58.56
	(0.00)	(0.00)	(0.00)	(4.75)	(6.25)	(5.10)	(2.66)	(21.88)	(18.48)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NBFI--Nonbank financial institutions. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 28

Average one-year transition rates for global NBFI by rating modifier, 1981-2023 (%)
Rating	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C	D	NR
AAA	89.23	5.59	0.41	0.21	0.00	0.00	0.00	0.00	0.21	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	4.35
	(18.11)	(15.66)	(2.85)	(2.65)	(0.00)	(0.00)	(0.00)	(0.00)	(2.65)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(6.69)
AA+	0.97	89.64	5.50	1.29	0.32	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.27
	(3.49)	(17.73)	(12.28)	(7.07)	(2.33)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(5.18)
AA	0.96	2.24	81.15	7.35	1.92	0.64	0.32	0.32	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	5.11
	(4.00)	(6.32)	(16.05)	(10.68)	(4.40)	(2.46)	(2.14)	(2.84)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(7.47)
AA-	0.00	0.21	3.14	82.01	9.00	2.30	0.21	0.21	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.21	2.72
	(0.00)	(1.38)	(8.04)	(17.21)	(10.28)	(6.44)	(0.90)	(1.32)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(1.07)	(5.60)
A+	0.00	0.00	0.28	2.79	81.62	7.52	0.56	0.42	0.28	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.14	6.41
	(0.00)	(0.00)	(1.31)	(6.98)	(12.97)	(7.86)	(1.78)	(1.43)	(1.27)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.85)	(6.73)
A	0.00	0.00	0.00	0.21	4.90	82.22	4.90	1.60	0.43	0.11	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	5.64
	(0.00)	(0.00)	(0.00)	(1.39)	(7.69)	(12.29)	(6.82)	(3.24)	(1.94)	(1.04)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(5.22)
A-	0.30	0.00	0.00	0.30	0.30	6.53	77.51	7.45	1.37	0.30	0.00	0.00	0.00	0.00	0.15	0.00	0.15	0.30	5.32
	(2.11)	(0.00)	(0.00)	(1.34)	(1.24)	(8.22)	(13.41)	(8.94)	(2.52)	(2.09)	(0.00)	(0.00)	(0.00)	(0.00)	(1.13)	(0.00)	(1.18)	(1.97)	(7.81)
BBB+	0.00	0.00	0.00	0.23	0.35	0.35	5.69	78.63	8.48	1.39	0.12	0.12	0.12	0.00	0.12	0.00	0.23	0.23	3.95
	(0.00)	(0.00)	(0.00)	(2.17)	(1.19)	(2.61)	(4.13)	(13.73)	(9.03)	(4.17)	(0.46)	(0.74)	(0.60)	(0.00)	(0.95)	(0.00)	(1.82)	(1.96)	(6.39)
BBB	0.00	0.00	0.00	0.10	0.30	0.00	0.60	7.76	77.81	5.17	0.70	0.30	0.30	0.30	0.00	0.10	0.00	0.40	6.17
	(0.00)	(0.00)	(0.00)	(2.25)	(2.21)	(0.00)	(2.23)	(7.77)	(12.37)	(6.49)	(2.71)	(1.82)	(1.70)	(0.94)	(0.00)	(0.54)	(0.00)	(1.70)	(4.80)
BBB-	0.00	0.00	0.00	0.00	0.13	0.13	0.00	0.40	7.41	75.53	4.76	1.59	0.53	0.53	0.00	0.13	0.00	0.66	8.20
	(0.00)	(0.00)	(0.00)	(0.00)	(1.01)	(1.64)	(0.00)	(1.12)	(7.01)	(12.45)	(5.87)	(4.66)	(4.30)	(2.25)	(0.00)	(0.91)	(0.00)	(2.29)	(7.19)
BB+	0.00	0.00	0.00	0.00	0.21	0.00	0.00	0.00	0.84	5.91	71.52	7.81	1.27	0.84	0.21	0.00	0.21	0.63	10.55
	(0.00)	(0.00)	(0.00)	(0.00)	(1.54)	(0.00)	(0.00)	(0.00)	(3.03)	(11.18)	(12.98)	(8.47)	(3.20)	(3.13)	(1.05)	(0.00)	(1.14)	(2.48)	(8.69)
BB	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.39	0.79	1.77	7.48	66.93	7.48	1.18	0.79	0.00	0.59	0.59	12.01
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(2.56)	(6.48)	(4.84)	(8.22)	(15.01)	(9.19)	(3.32)	(5.39)	(0.00)	(3.04)	(2.41)	(10.40)
BB-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.14	0.42	0.56	6.29	70.21	6.15	1.96	0.42	0.28	0.84	12.73
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.97)	(2.29)	(2.26)	(7.66)	(13.86)	(6.93)	(4.46)	(2.15)	(1.95)	(1.76)	(9.40)
B+	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.59	0.00	0.99	11.86	59.49	10.28	1.78	1.19	0.99	12.85
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.62)	(0.00)	(3.67)	(9.94)	(14.08)	(7.79)	(4.38)	(2.82)	(2.49)	(8.23)
B	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.41	0.00	0.20	0.61	8.76	57.23	8.35	5.30	3.46	15.68
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(1.09)	(0.00)	(1.25)	(2.18)	(8.15)	(12.96)	(7.38)	(5.70)	(7.31)	(10.74)
B-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.35	0.00	0.35	0.00	0.35	0.70	10.21	62.32	7.04	3.52	15.14
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(2.68)	(0.00)	(2.10)	(0.00)	(2.10)	(2.23)	(12.29)	(17.43)	(11.03)	(10.33)	(11.33)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.58	0.58	1.74	8.14	41.86	23.84	23.26
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(2.87)	(3.84)	(4.59)	(13.18)	(20.48)	(22.73)	(19.59)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NBFI--Nonbank financial institutions. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 29

Average one-year transition rates by major region for NBFI, 1981-2023 (%)
Rating	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	89.12	7.06	0.00	0.29	0.00	0.00	0.00	0.00	3.53
	(23.87)	(20.74)	(0.00)	(3.17)	(0.00)	(0.00)	(0.00)	(0.00)	(6.89)
AA	0.55	91.13	5.36	0.00	0.00	0.00	0.00	0.18	2.77
	(2.87)	(13.29)	(9.97)	(0.00)	(0.00)	(0.00)	(0.00)	(1.19)	(7.68)
A	0.19	1.22	89.55	4.33	0.00	0.09	0.09	0.19	4.33
	(0.88)	(3.64)	(8.96)	(5.41)	(0.00)	(0.56)	(0.60)	(1.16)	(5.28)
BBB	0.00	0.26	2.91	86.67	2.48	0.60	0.17	0.51	6.41
	(0.00)	(2.16)	(3.39)	(9.27)	(4.86)	(1.79)	(1.11)	(1.52)	(5.17)
BB	0.00	0.00	0.15	3.40	79.17	6.35	0.59	0.89	9.45
	(0.00)	(0.00)	(1.37)	(6.61)	(13.54)	(8.06)	(2.72)	(2.87)	(8.26)
B	0.00	0.00	0.00	0.59	4.99	76.51	4.41	2.79	10.72
	(0.00)	(0.00)	(0.00)	(3.08)	(6.38)	(11.86)	(4.93)	(6.69)	(7.93)
CCC/C	0.00	0.00	0.00	0.00	1.14	13.64	39.77	30.68	14.77
	(0.00)	(0.00)	(0.00)	(0.00)	(4.71)	(16.45)	(28.17)	(29.88)	(25.99)
Europe
AAA	91.67	3.57	0.00	0.00	0.00	0.00	0.00	0.00	4.76
	(14.79)	(10.66)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(11.84)
AA	0.29	88.25	7.16	0.57	0.00	0.00	0.00	0.00	3.72
	(1.28)	(12.16)	(9.89)	(2.83)	(0.00)	(0.00)	(0.00)	(0.00)	(5.61)
A	0.00	1.24	87.92	2.66	0.00	0.00	0.00	0.00	8.17
	(0.00)	(3.99)	(8.41)	(4.22)	(0.00)	(0.00)	(0.00)	(0.00)	(8.60)
BBB	0.00	0.00	4.50	83.92	2.89	0.00	0.00	0.00	8.68
	(0.00)	(0.00)	(6.74)	(14.82)	(5.08)	(0.00)	(0.00)	(0.00)	(11.72)
BB	0.00	0.00	0.00	2.10	74.83	6.29	0.00	0.70	16.08
	(0.00)	(0.00)	(0.00)	(7.43)	(21.72)	(9.00)	(0.00)	(1.88)	(19.76)
B	0.00	0.00	0.00	0.00	7.19	71.90	2.61	1.31	16.99
	(0.00)	(0.00)	(0.00)	(0.00)	(6.28)	(20.85)	(3.84)	(2.74)	(20.06)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	40.00	40.00	20.00
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(47.75)	(40.99)	(36.33)
Emerging and frontier markets
AAA	85.71	14.29	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	(37.80)	(37.80)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)
AA	5.00	90.00	0.00	0.00	0.00	0.00	0.00	0.00	5.00
	(22.39)	(30.82)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(22.39)
A	0.00	0.54	90.86	6.45	0.00	0.00	0.00	0.00	2.15
	(0.00)	(1.67)	(11.74)	(10.79)	(0.00)	(0.00)	(0.00)	(0.00)	(5.72)
BBB	0.00	0.00	0.70	92.33	2.91	0.23	0.00	0.23	3.60
	(0.00)	(0.00)	(1.35)	(7.96)	(5.94)	(0.49)	(0.00)	(2.44)	(4.31)
BB	0.00	0.00	0.00	2.96	80.08	2.83	0.27	0.40	13.46
	(0.00)	(0.00)	(0.00)	(3.88)	(9.20)	(3.52)	(1.16)	(1.03)	(9.68)
B	0.00	0.00	0.00	0.49	6.16	69.21	3.69	1.48	18.97
	(0.00)	(0.00)	(0.00)	(1.39)	(6.26)	(14.48)	(8.22)	(2.76)	(11.98)
CCC/C	0.00	0.00	0.00	0.00	0.00	8.77	49.12	5.26	36.84
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(19.17)	(25.40)	(13.46)	(25.53)
Other developed
AAA	86.54	3.85	0.00	0.00	0.00	0.00	0.00	0.00	9.62
	(27.67)	(16.81)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(23.66)
AA	0.53	90.00	5.79	0.00	0.00	0.00	0.00	0.00	3.68
	(2.95)	(15.31)	(11.34)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(10.73)
A	0.00	0.99	88.89	2.38	0.00	0.00	0.00	0.20	7.54
	(0.00)	(3.21)	(11.43)	(4.53)	(0.00)	(0.00)	(0.00)	(3.18)	(10.03)
BBB	0.00	0.00	4.27	83.63	1.78	0.36	0.00	1.07	8.90
	(0.00)	(0.00)	(7.11)	(14.96)	(4.82)	(2.45)	(0.00)	(3.24)	(10.94)
BB	0.00	0.00	0.00	2.07	81.38	2.76	0.00	1.38	12.41
	(0.00)	(0.00)	(0.00)	(4.71)	(20.03)	(10.18)	(0.00)	(5.46)	(17.21)
B	0.00	0.00	0.00	0.00	4.65	69.77	3.49	6.98	15.12
	(0.00)	(0.00)	(0.00)	(0.00)	(8.50)	(27.38)	(7.87)	(19.82)	(25.54)
CCC/C	0.00	0.00	0.00	0.00	0.00	5.56	27.78	38.89	27.78
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(16.41)	(43.42)	(39.53)	(34.03)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NBFI--Nonbank financial institutions. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 30

Average cumulative default rates for NBFI, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.09	0.19	0.28	0.28	0.28	0.28	0.28	0.28	0.42	0.57	0.73	0.90	1.08	1.28	1.28
A	0.13	0.31	0.50	0.75	1.02	1.30	1.60	1.91	2.18	2.46	2.69	2.93	3.19	3.38	3.58
BBB	0.42	0.91	1.57	2.23	2.74	3.13	3.49	3.88	4.24	4.64	5.07	5.54	5.95	6.51	7.01
BB	0.71	1.77	2.92	4.08	4.95	5.55	6.20	6.61	6.84	7.08	7.49	7.93	8.09	8.09	8.09
B	2.50	5.78	8.49	10.18	11.49	13.01	13.49	14.14	14.86	15.66	16.20	16.60	17.05	17.30	17.30
CCC/C	23.84	30.43	34.74	36.04	37.34	38.66	40.66	41.36	42.08	42.85	42.85	42.85	42.85	42.85	42.85
Investment grade	0.23	0.50	0.85	1.19	1.47	1.72	1.95	2.20	2.45	2.71	2.96	3.23	3.49	3.76	3.99
Speculative grade	2.70	4.98	6.96	8.34	9.42	10.46	11.14	11.68	12.14	12.66	13.09	13.48	13.74	13.83	13.83
All rated	1.03	1.96	2.83	3.50	4.04	4.52	4.90	5.23	5.54	5.88	6.18	6.48	6.73	6.96	7.13
NBFI--Nonbank financial institutions. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 31

Average cumulative default rates for NBFI by rating modifier, 1981- 2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA+	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA-	0.21	0.43	0.65	0.65	0.65	0.65	0.65	0.65	0.98	1.32	1.69	2.09	2.51	2.95	2.95
A+	0.14	0.29	0.44	0.61	0.78	0.97	1.17	1.59	1.80	2.02	2.26	2.51	2.78	3.06	3.38
A	0.00	0.00	0.00	0.12	0.24	0.51	0.79	1.08	1.40	1.74	1.92	2.12	2.33	2.55	2.78
A-	0.30	0.79	1.30	1.84	2.42	2.83	3.27	3.50	3.75	4.01	4.30	4.61	4.95	4.95	4.95
BBB+	0.23	0.48	1.01	1.73	2.21	2.74	3.14	3.35	3.59	4.37	5.21	5.51	5.51	5.86	6.61
BBB	0.40	0.94	1.28	1.66	2.33	2.76	3.22	3.87	4.23	4.23	4.23	4.69	5.44	5.73	5.73
BBB-	0.66	1.37	2.58	3.53	3.87	4.05	4.25	4.47	4.97	5.53	6.15	6.82	7.20	8.43	9.33
BB+	0.63	1.08	2.27	3.28	4.09	4.39	5.04	5.40	5.40	5.40	5.88	6.40	6.98	6.98	6.98
BB	0.59	2.05	3.59	4.30	4.81	5.37	6.28	6.94	7.64	8.02	8.02	8.02	8.02	8.02	8.02
BB-	0.84	2.04	2.86	4.47	5.64	6.49	6.96	7.22	7.22	7.53	8.22	8.99	8.99	8.99	8.99
B+	0.99	3.04	4.79	6.18	6.67	7.48	8.07	8.72	9.43	10.21	11.52	12.48	13.56	14.15	14.15
B	3.46	7.10	10.54	12.50	14.33	16.83	17.42	18.07	19.14	20.40	20.40	20.40	20.40	20.40	20.40
B-	3.52	8.42	11.65	13.42	15.38	16.45	16.45	17.14	17.14	17.14	17.14	17.14	17.14	17.14	17.14
CCC/C	23.84	30.43	34.74	36.04	37.34	38.66	40.66	41.36	42.08	42.85	42.85	42.85	42.85	42.85	42.85
Investment grade	0.23	0.50	0.85	1.19	1.47	1.72	1.95	2.20	2.45	2.71	2.96	3.23	3.49	3.76	3.99
Speculative grade	2.70	4.98	6.96	8.34	9.42	10.46	11.14	11.68	12.14	12.66	13.09	13.48	13.74	13.83	13.83
All rated	1.03	1.96	2.83	3.50	4.04	4.52	4.90	5.23	5.54	5.88	6.18	6.48	6.73	6.96	7.13
NBFI--Nonbank financial insitutions. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 32

Time to default from original rating for global NBFI defaulters, 1981-2023
Original rating	Defaults (no.)	Average time from original rating (years)*	Median time from original rating (years)	Standard deviation of time from original rating (years)
AAA	1	28.00	28.00
AA	4	15.89	19.03	10.57
A	1	10.84	10.84
BBB	20	6.89	4.35	5.87
BB	31	4.89	3.70	3.72
B	39	4.44	3.27	3.36
CCC/C	20	2.19	1.15	2.33
*Or Dec. 31, 1980, whichever is later. NBFI--Nonbank financial institution. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Insurance rating action trends and ratings performance

Table 33

Summary of annual insurance rating action trends (%)
	Issuers as of Jan. 1 (no.)	Upgrades	Downgrades*	Defaults	Withdrawn ratings	Changed ratings	Unchanged ratings	Downgrade-to-upgrade ratio
1981	34	11.76	5.88	0.00	2.94	20.59	79.41	0.50
1982	34	8.82	11.76	2.94	0.00	23.53	76.47	1.33
1983	42	4.76	4.76	4.76	2.38	16.67	83.33	1.00
1984	53	3.77	3.77	0.00	1.89	9.43	90.57	1.00
1985	67	4.48	5.97	1.49	0.00	11.94	88.06	1.33
1986	93	5.38	7.53	0.00	5.38	18.28	81.72	1.40
1987	124	5.65	4.03	0.00	2.42	12.10	87.90	0.71
1988	139	2.88	12.23	0.00	1.44	16.55	83.45	4.25
1989	173	5.20	5.78	0.58	1.16	12.72	87.28	1.11
1990	201	3.48	9.95	0.00	0.50	13.93	86.07	2.86
1991	222	3.60	20.72	1.35	1.80	27.48	72.52	5.75
1992	276	6.16	16.30	0.72	1.09	24.28	75.72	2.65
1993	313	6.39	6.71	0.32	3.19	16.61	83.39	1.05
1994	344	8.14	14.83	0.29	2.03	25.29	74.71	1.82
1995	379	7.12	16.36	0.26	1.85	25.59	74.41	2.30
1996	411	13.63	10.71	0.00	3.89	28.22	71.78	0.79
1997	462	9.96	4.33	0.22	6.71	21.21	78.79	0.43
1998	557	8.98	8.44	0.00	4.85	22.26	77.74	0.94
1999	605	8.60	10.58	0.66	4.79	24.63	75.37	1.23
2000	624	5.93	11.38	1.44	7.53	26.28	73.72	1.92
2001	610	3.61	19.51	0.16	6.72	30.00	70.00	5.41
2002	622	4.02	25.56	0.48	7.88	37.94	62.06	6.36
2003	621	3.70	21.74	0.48	5.15	31.08	68.92	5.87
2004	636	6.92	8.02	0.47	5.50	20.91	79.09	1.16
2005	664	12.05	5.87	0.00	3.16	21.08	78.92	0.49
2006	717	11.30	4.46	0.28	4.04	20.08	79.92	0.40
2007	782	13.30	4.60	0.00	6.27	24.17	75.83	0.35
2008	819	6.59	13.06	0.49	5.74	25.89	74.11	1.98
2009	850	5.06	17.88	0.47	7.76	31.18	68.82	3.53
2010	828	7.61	9.90	0.24	4.23	21.98	78.02	1.30
2011	839	5.60	10.13	0.36	6.20	22.29	77.71	1.81
2012	824	6.92	10.80	0.12	4.61	22.45	77.55	1.56
2013	835	13.17	4.55	0.00	6.35	24.07	75.93	0.35
2014	831	10.59	5.17	0.00	4.57	20.34	79.66	0.49
2015	859	7.22	7.10	0.12	5.94	20.37	79.63	0.98
2016	870	4.94	5.52	0.11	6.67	17.24	82.76	1.12
2017	865	4.51	5.90	0.12	7.75	18.27	81.73	1.31
2018	839	6.91	4.89	0.00	6.67	18.47	81.53	0.71
2019	814	6.39	2.58	0.12	5.04	14.13	85.87	0.40
2020	814	2.70	4.79	0.12	5.90	13.51	86.49	1.77
2021	808	5.45	1.86	0.00	5.57	12.87	87.13	0.34
2022	788	5.96	1.65	0.00	4.82	12.44	87.56	0.28
2023	766	3.66	2.48	0.00	2.74	8.88	91.12	0.68
Weighted average		7.04	8.76	0.25	5.24	21.28	78.72	1.59
Average		6.81	9.07	0.45	4.31	20.63	79.37	1.70
Median		6.16	7.10	0.12	4.79	20.91	79.09	1.16
Standard deviation		2.98	5.81	0.87	2.25	6.38	6.38	1.60
Minimum		2.70	1.65	0.00	0.00	8.88	62.06	0.28
Maximum		13.63	25.56	4.76	7.88	37.94	91.12	6.36
This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. *Excludes downgrades to 'D', which are shown separately in the "Defaults" column. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 34

Global 2023 one-year transition rates for insurance companies (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
Global
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	97.32	0.89	0.00	0.00	0.00	0.00	0.00	1.79
A	0.00	0.23	97.89	0.23	0.00	0.00	0.00	0.00	1.64
BBB	0.00	0.00	1.41	95.07	0.00	0.00	0.00	0.00	3.52
BB	0.00	0.00	2.50	5.00	82.50	0.00	2.50	0.00	7.50
B	0.00	0.00	0.00	0.00	6.52	80.43	4.35	0.00	8.70
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
U.S. and tax havens
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	98.46	1.54	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	98.99	0.51	0.00	0.00	0.00	0.00	0.51
BBB	0.00	0.00	0.00	97.56	0.00	0.00	0.00	0.00	2.44
BB	0.00	0.00	0.00	9.09	81.82	0.00	0.00	0.00	9.09
B	0.00	0.00	0.00	0.00	6.06	78.79	3.03	0.00	12.12
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Europe
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	92.31	0.00	0.00	0.00	0.00	0.00	0.00	7.69
A	0.00	0.90	95.50	0.00	0.00	0.00	0.00	0.00	3.60
BBB	0.00	0.00	12.50	87.50	0.00	0.00	0.00	0.00	0.00
BB	0.00	0.00	0.00	0.00	50.00	0.00	50.00	0.00	0.00
B	0.00	0.00	0.00	0.00	0.00	100.00	0.00	0.00	0.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Emerging markets
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00
BBB	0.00	0.00	0.00	97.22	0.00	0.00	0.00	0.00	2.78
BB	0.00	0.00	0.00	0.00	88.46	0.00	3.85	0.00	7.69
B	0.00	0.00	0.00	0.00	9.09	81.82	9.09	0.00	0.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Other developed
AAA	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
AA	0.00	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
A	0.00	0.00	96.36	0.00	0.00	0.00	0.00	0.00	3.64
BBB	0.00	0.00	0.00	75.00	0.00	0.00	0.00	0.00	25.00
BB	0.00	0.00	33.33	33.33	33.33	0.00	0.00	0.00	0.00
B	0.00	0.00	0.00	0.00	0.00	100.00	0.00	0.00	0.00
CCC/C	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
N/A--Not applicable. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 35

Global average transition rates for insurance companies, 1981-2023 (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One-year
AAA	88.09	9.77	0.27	0.00	0.07	0.07	0.13	0.00	1.61
	(11.88)	(11.27)	(1.28)	(0.00)	(0.29)	(0.42)	(0.84)	(0.00)	(2.34)
AA	0.50	88.29	6.98	0.33	0.04	0.04	0.06	0.04	3.73
	(0.96)	(6.46)	(5.55)	(0.87)	(0.14)	(0.13)	(0.45)	(0.14)	(2.11)
A	0.01	2.11	90.95	2.51	0.15	0.06	0.01	0.09	4.11
	(0.06)	(2.20)	(4.57)	(2.47)	(0.46)	(0.22)	(0.05)	(0.23)	(1.86)
BBB	0.00	0.14	5.21	84.21	2.34	0.29	0.24	0.17	7.39
	(0.00)	(0.66)	(3.47)	(5.26)	(2.50)	(0.93)	(0.69)	(0.63)	(3.00)
BB	0.00	0.09	0.52	7.69	74.94	3.46	1.04	0.52	11.75
	(0.00)	(0.79)	(1.97)	(8.42)	(11.99)	(4.24)	(2.89)	(1.98)	(6.97)
B	0.00	0.12	0.23	0.58	5.81	76.54	1.86	1.63	13.24
	(0.00)	(0.95)	(2.20)	(2.45)	(7.17)	(11.30)	(3.68)	(4.26)	(6.24)
CCC/C	0.00	0.00	0.00	0.00	3.49	12.79	40.70	23.26	19.77
	(0.00)	(0.00)	(0.00)	(0.00)	(11.47)	(21.95)	(32.52)	(27.74)	(29.69)
Three-year
AAA	66.62	25.28	1.81	0.07	0.13	0.13	0.27	0.33	5.35
	(18.44)	(17.17)	(2.62)	(0.42)	(0.52)	(0.60)	(1.00)	(0.83)	(5.70)
AA	1.15	69.93	15.97	1.57	0.16	0.20	0.06	0.24	10.73
	(1.94)	(10.77)	(7.10)	(2.12)	(0.47)	(0.54)	(0.18)	(0.41)	(3.78)
A	0.04	4.80	76.43	4.85	0.54	0.11	0.10	0.37	12.76
	(0.14)	(4.47)	(9.21)	(3.29)	(1.16)	(0.59)	(0.22)	(0.86)	(4.09)
BBB	0.00	0.49	12.68	62.44	3.55	0.73	0.34	0.86	18.91
	(0.00)	(1.41)	(6.04)	(8.72)	(2.81)	(0.92)	(1.04)	(1.65)	(4.62)
BB	0.00	0.09	1.78	15.61	44.58	4.86	1.12	1.96	30.00
	(0.00)	(0.82)	(3.85)	(10.85)	(14.78)	(4.30)	(3.75)	(4.56)	(10.47)
B	0.00	0.00	1.17	2.48	10.97	46.74	1.44	5.22	31.98
	(0.00)	(0.00)	(4.31)	(6.91)	(9.97)	(11.74)	(2.19)	(7.64)	(10.78)
CCC/C	0.00	0.00	1.18	2.35	4.71	17.65	14.12	30.59	29.41
	(0.00)	(0.00)	(10.97)	(10.77)	(10.34)	(23.37)	(18.52)	(29.75)	(31.17)
Five-year
AAA	49.30	33.71	4.95	0.40	0.07	0.27	0.20	0.87	10.23
	(18.65)	(17.26)	(4.92)	(0.94)	(0.42)	(0.83)	(0.66)	(1.28)	(8.14)
AA	1.44	57.18	21.12	2.26	0.30	0.36	0.06	0.66	16.63
	(2.23)	(10.76)	(6.88)	(2.44)	(0.58)	(0.77)	(0.19)	(0.91)	(3.82)
A	0.10	6.11	65.74	5.44	0.78	0.16	0.19	0.68	20.81
	(0.56)	(5.49)	(10.85)	(3.34)	(1.28)	(0.49)	(0.59)	(1.24)	(4.89)
BBB	0.00	0.70	16.12	49.48	3.03	0.62	0.45	1.46	28.14
	(0.00)	(1.96)	(5.53)	(7.66)	(2.11)	(0.75)	(1.16)	(2.34)	(5.55)
BB	0.00	0.71	2.44	17.90	29.40	4.48	0.92	3.36	40.79
	(0.00)	(2.18)	(4.58)	(9.04)	(10.82)	(3.62)	(3.15)	(6.41)	(11.74)
B	0.00	0.00	2.18	3.27	11.66	31.10	1.09	7.93	42.77
	(0.00)	(0.00)	(6.13)	(7.79)	(10.27)	(10.03)	(2.01)	(9.32)	(13.52)
CCC/C	0.00	0.00	1.19	0.00	9.52	13.10	2.38	33.33	40.48
	(0.00)	(0.00)	(11.04)	(0.00)	(16.11)	(19.05)	(7.04)	(28.73)	(30.02)
10-year
AAA	24.08	41.14	9.43	1.74	0.13	0.47	0.13	1.54	21.34
	(14.66)	(15.25)	(6.40)	(2.60)	(0.46)	(1.13)	(0.53)	(1.62)	(10.67)
AA	1.33	36.39	26.69	3.19	0.49	0.49	0.05	1.60	29.78
	(2.18)	(8.68)	(6.73)	(2.49)	(0.69)	(0.70)	(0.14)	(1.24)	(5.19)
A	0.15	6.97	48.69	5.61	1.06	0.28	0.23	1.55	35.47
	(1.05)	(4.44)	(10.11)	(3.00)	(1.63)	(0.37)	(0.44)	(1.77)	(5.84)
BBB	0.00	1.39	18.47	31.11	1.80	0.51	0.15	2.75	43.83
	(0.00)	(3.63)	(5.58)	(4.24)	(2.02)	(0.38)	(0.58)	(3.95)	(3.92)
BB	0.00	0.54	4.71	16.02	11.04	3.63	0.00	9.15	54.91
	(0.00)	(1.41)	(6.51)	(7.15)	(6.30)	(3.30)	(0.00)	(14.20)	(16.47)
B	0.00	0.00	4.18	10.44	8.88	11.75	0.52	13.05	51.17
	(0.00)	(0.00)	(10.36)	(14.65)	(9.86)	(8.30)	(4.46)	(11.36)	(18.12)
CCC/C	0.00	0.00	1.27	0.00	8.86	0.00	0.00	40.51	49.37
	(0.00)	(0.00)	(11.41)	(0.00)	(16.20)	(0.00)	(0.00)	(31.41)	(28.42)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 36

Average one-year transition rates for global insurance companies by rating modifier, 1981-2023 (%)
Rating	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C	D	NR
AAA	88.09	7.16	1.74	0.87	0.07	0.20	0.00	0.00	0.00	0.00	0.00	0.07	0.00	0.00	0.07	0.00	0.13	0.00	1.61
	(11.88)	(11.14)	(1.93)	(1.57)	(0.42)	(0.88)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.29)	(0.00)	(0.00)	(0.42)	(0.00)	(0.84)	(0.00)	(2.34)
AA+	1.73	78.69	11.77	3.72	0.74	0.37	0.25	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.73
	(2.75)	(19.12)	(13.66)	(5.91)	(4.54)	(1.52)	(1.21)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.56)
AA	0.46	0.97	82.35	8.54	2.35	0.87	0.46	0.15	0.26	0.00	0.05	0.05	0.00	0.00	0.00	0.00	0.15	0.05	3.27
	(1.29)	(1.75)	(12.57)	(9.74)	(3.04)	(1.50)	(1.49)	(0.51)	(1.11)	(0.00)	(0.26)	(0.24)	(0.00)	(0.00)	(0.00)	(0.00)	(0.79)	(0.24)	(2.63)
AA-	0.12	0.21	3.36	79.91	9.72	1.11	0.66	0.21	0.16	0.00	0.00	0.00	0.00	0.04	0.04	0.00	0.00	0.04	4.43
	(0.43)	(0.57)	(5.15)	(10.26)	(7.71)	(2.60)	(1.56)	(0.72)	(0.60)	(0.00)	(0.00)	(0.00)	(0.00)	(0.23)	(0.23)	(0.00)	(0.00)	(0.23)	(3.11)
A+	0.00	0.18	0.36	4.63	82.18	6.09	1.43	0.50	0.24	0.06	0.00	0.06	0.00	0.00	0.00	0.00	0.00	0.03	4.25
	(0.00)	(0.61)	(1.91)	(3.57)	(8.47)	(4.48)	(2.21)	(1.14)	(1.02)	(0.24)	(0.00)	(0.25)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.31)	(2.66)
A	0.03	0.09	0.29	0.52	6.35	81.66	5.15	0.83	0.63	0.20	0.06	0.09	0.00	0.00	0.06	0.00	0.03	0.14	3.88
	(0.17)	(0.55)	(1.65)	(1.09)	(4.15)	(8.47)	(3.60)	(1.86)	(1.14)	(0.96)	(0.67)	(0.30)	(0.00)	(0.00)	(0.37)	(0.00)	(0.15)	(0.38)	(2.74)
A-	0.00	0.03	0.06	0.15	0.55	7.41	81.94	3.73	1.13	0.31	0.06	0.09	0.09	0.09	0.03	0.00	0.00	0.09	4.22
	(0.00)	(0.23)	(0.29)	(0.66)	(1.17)	(4.63)	(8.14)	(2.88)	(2.58)	(1.09)	(0.25)	(0.44)	(0.45)	(0.32)	(0.23)	(0.00)	(0.00)	(0.35)	(2.63)
BBB+	0.00	0.00	0.11	0.06	0.63	0.91	9.19	75.63	5.25	1.08	0.29	0.11	0.11	0.06	0.06	0.00	0.11	0.00	6.39
	(0.00)	(0.00)	(0.41)	(0.45)	(1.32)	(2.98)	(6.74)	(10.27)	(4.95)	(1.87)	(1.48)	(0.54)	(1.77)	(0.27)	(1.39)	(0.00)	(1.29)	(0.00)	(3.57)
BBB	0.00	0.00	0.07	0.07	0.20	0.54	0.88	9.51	73.30	4.79	1.48	0.40	0.20	0.20	0.13	0.00	0.27	0.20	7.75
	(0.00)	(0.00)	(0.63)	(1.17)	(0.73)	(1.46)	(1.82)	(6.62)	(10.84)	(4.38)	(3.39)	(1.69)	(0.92)	(0.79)	(0.67)	(0.00)	(0.84)	(0.70)	(5.06)
BBB-	0.00	0.00	0.11	0.00	0.00	0.11	0.33	1.76	10.92	70.34	4.96	0.88	0.44	0.33	0.22	0.00	0.44	0.44	8.71
	(0.00)	(0.00)	(0.53)	(0.00)	(0.00)	(0.53)	(0.88)	(2.56)	(6.08)	(10.04)	(6.12)	(2.93)	(1.49)	(2.13)	(0.79)	(0.00)	(1.30)	(3.58)	(6.12)
BB+	0.00	0.00	0.00	0.00	0.20	0.40	0.40	0.20	2.17	10.87	64.62	4.74	3.95	0.79	0.20	0.20	0.40	0.79	10.08
	(0.00)	(0.00)	(0.00)	(0.00)	(1.01)	(3.58)	(2.82)	(1.69)	(4.08)	(9.39)	(17.03)	(8.47)	(6.59)	(4.02)	(1.07)	(1.07)	(1.81)	(3.71)	(8.33)
BB	0.00	0.00	0.26	0.00	0.00	0.00	0.26	0.26	1.03	3.86	11.31	61.95	3.86	1.29	1.29	0.00	1.54	0.51	12.60
	(0.00)	(0.00)	(2.28)	(0.00)	(0.00)	(0.00)	(1.46)	(1.35)	(4.83)	(9.00)	(11.15)	(17.15)	(6.42)	(3.28)	(4.13)	(0.00)	(5.58)	(2.65)	(10.27)
BB-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.38	0.00	0.38	5.34	11.83	57.63	5.34	2.29	1.53	1.53	0.00	13.74
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(3.59)	(0.00)	(4.40)	(10.11)	(13.48)	(21.93)	(12.38)	(6.84)	(3.76)	(6.22)	(0.00)	(15.04)
B+	0.00	0.00	0.00	0.00	0.00	0.00	0.37	0.00	0.00	0.00	0.74	5.90	7.75	61.99	6.27	2.95	1.85	2.21	9.96
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.33)	(0.00)	(0.00)	(0.00)	(4.09)	(10.58)	(9.84)	(20.26)	(9.25)	(5.55)	(6.92)	(6.76)	(9.49)
B	0.00	0.00	0.00	0.22	0.00	0.22	0.00	0.22	0.22	0.22	0.22	0.22	1.78	7.57	69.93	4.45	0.89	1.11	12.69
	(0.00)	(0.00)	(0.00)	(1.94)	(0.00)	(1.94)	(0.00)	(2.75)	(1.49)	(1.49)	(1.04)	(0.84)	(4.82)	(10.73)	(13.70)	(5.06)	(2.94)	(2.72)	(9.67)
B-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.71	0.71	0.00	0.00	0.00	0.71	2.13	14.18	53.19	4.96	2.13	21.28
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(6.03)	(2.95)	(0.00)	(0.00)	(0.00)	(4.91)	(5.34)	(16.22)	(17.07)	(9.06)	(10.12)	(20.11)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.33	1.16	1.16	2.33	9.30	40.70	23.26	19.77
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(10.70)	(4.76)	(4.76)	(6.96)	(20.86)	(32.52)	(27.74)	(29.69)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 37

Average one-year transition rates by major region for insurance companies, 1981-2023 (%)
Rating	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	89.30	8.70	0.26	0.00	0.09	0.09	0.09	0.00	1.48
	(12.65)	(11.99)	(1.59)	(0.00)	(0.39)	(0.53)	(0.53)	(0.00)	(2.41)
AA	0.64	88.60	6.64	0.35	0.06	0.06	0.09	0.06	3.52
	(1.22)	(7.46)	(5.58)	(0.88)	(0.23)	(0.19)	(0.61)	(0.21)	(2.60)
A	0.02	2.23	90.54	2.64	0.22	0.09	0.02	0.13	4.12
	(0.10)	(2.61)	(5.47)	(2.71)	(0.60)	(0.34)	(0.10)	(0.30)	(2.46)
BBB	0.00	0.21	4.47	85.47	2.49	0.43	0.39	0.21	6.32
	(0.00)	(0.91)	(3.72)	(7.21)	(3.27)	(1.39)	(0.94)	(0.87)	(3.91)
BB	0.00	0.16	0.47	10.13	72.47	4.11	1.42	0.95	10.28
	(0.00)	(1.20)	(2.02)	(11.77)	(13.57)	(5.44)	(3.80)	(2.67)	(7.95)
B	0.00	0.15	0.30	0.45	5.34	79.08	1.93	1.48	11.28
	(0.00)	(1.12)	(2.50)	(2.42)	(8.38)	(11.68)	(4.17)	(4.41)	(7.75)
CCC/C	0.00	0.00	0.00	0.00	3.03	13.64	39.39	28.79	15.15
	(0.00)	(0.00)	(0.00)	(0.00)	(12.17)	(25.69)	(33.27)	(30.87)	(25.68)
Europe
AAA	85.02	12.56	0.48	0.00	0.00	0.00	0.48	0.00	1.45
	(19.05)	(16.73)	(2.08)	(0.00)	(0.00)	(0.00)	(3.13)	(0.00)	(3.78)
AA	0.29	86.92	7.98	0.48	0.00	0.00	0.00	0.00	4.33
	(1.33)	(11.55)	(10.82)	(1.93)	(0.00)	(0.00)	(0.00)	(0.00)	(4.70)
A	0.00	2.18	90.41	2.85	0.08	0.00	0.00	0.04	4.45
	(0.00)	(2.76)	(5.40)	(4.13)	(0.45)	(0.00)	(0.00)	(0.33)	(3.01)
BBB	0.00	0.14	9.09	78.98	1.28	0.28	0.14	0.14	9.94
	(0.00)	(0.63)	(6.96)	(10.68)	(3.04)	(1.28)	(1.15)	(0.84)	(9.09)
BB	0.00	0.00	2.50	6.25	61.25	0.00	1.25	0.00	28.75
	(0.00)	(0.00)	(10.12)	(13.05)	(21.82)	(0.00)	(7.98)	(0.00)	(21.46)
B	0.00	0.00	0.00	6.06	9.09	57.58	0.00	0.00	27.27
	(0.00)	(0.00)	(0.00)	(24.55)	(22.38)	(36.68)	(0.00)	(0.00)	(35.13)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	16.67	16.67	66.67
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(41.67)	(41.67)	(52.70)
Emerging and frontier markets
AAA	50.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	50.00
	(70.71)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(70.71)
AA	0.00	87.04	9.26	0.00	0.00	0.00	0.00	0.00	3.70
	(0.00)	(25.05)	(17.98)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(15.69)
A	0.00	0.69	93.94	2.63	0.00	0.11	0.00	0.00	2.63
	(0.00)	(1.53)	(5.61)	(4.66)	(0.00)	(0.50)	(0.00)	(0.00)	(2.24)
BBB	0.00	0.00	3.61	86.04	2.89	0.00	0.00	0.12	7.34
	(0.00)	(0.00)	(3.15)	(7.42)	(3.55)	(0.00)	(0.00)	(0.50)	(5.15)
BB	0.00	0.00	0.00	4.05	81.35	2.97	0.27	0.00	11.35
	(0.00)	(0.00)	(0.00)	(7.15)	(13.34)	(4.08)	(1.01)	(0.00)	(8.82)
B	0.00	0.00	0.00	0.00	8.21	73.88	1.49	0.75	15.67
	(0.00)	(0.00)	(0.00)	(0.00)	(10.77)	(18.45)	(3.56)	(2.70)	(17.58)
CCC/C	0.00	0.00	0.00	0.00	0.00	0.00	33.33	0.00	66.67
	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(52.70)	(0.00)	(52.70)
Other developed
AAA	83.09	14.71	0.00	0.00	0.00	0.00	0.00	0.00	2.21
	(22.62)	(22.95)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.23)
AA	0.16	88.96	7.00	0.00	0.00	0.00	0.00	0.00	3.89
	(0.84)	(9.94)	(9.54)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.52)
A	0.00	2.39	92.03	0.97	0.09	0.00	0.00	0.09	4.43
	(0.00)	(3.69)	(6.68)	(3.24)	(0.80)	(0.00)	(0.00)	(1.35)	(3.99)
BBB	0.00	0.00	5.90	81.64	1.97	0.00	0.00	0.00	10.49
	(0.00)	(0.00)	(9.13)	(11.64)	(5.54)	(0.00)	(0.00)	(0.00)	(9.39)
BB	0.00	0.00	1.16	5.81	79.07	3.49	2.33	0.00	8.14
	(0.00)	(0.00)	(6.24)	(13.67)	(24.36)	(10.61)	(6.70)	(0.00)	(10.52)
B	0.00	0.00	0.00	0.00	4.76	38.10	4.76	14.29	38.10
	(0.00)	(0.00)	(0.00)	(0.00)	(12.10)	(41.05)	(15.23)	(26.84)	(45.02)
CCC/C	0.00	0.00	0.00	0.00	9.09	18.18	63.64	0.00	9.09
	(0.00)	(0.00)	(0.00)	(0.00)	(30.49)	(34.09)	(39.76)	(0.00)	(20.45)
Note: The numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 38

Average cumulative default rates for insurance companies, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.07	0.33	0.60	0.87	1.14	1.27	1.40	1.47	1.54	1.61	1.67	1.74	1.81	1.87
AA	0.04	0.14	0.24	0.44	0.63	0.83	0.96	1.12	1.29	1.41	1.52	1.59	1.68	1.76	1.85
A	0.09	0.20	0.35	0.50	0.62	0.75	0.91	0.99	1.05	1.15	1.26	1.32	1.38	1.42	1.50
BBB	0.17	0.52	0.83	1.10	1.35	1.56	1.71	1.87	2.08	2.16	2.20	2.20	2.29	2.39	2.45
BB	0.52	1.23	1.89	2.47	3.09	4.04	4.95	5.78	6.67	7.22	7.96	8.44	8.62	8.81	9.03
B	1.63	3.22	4.93	5.93	6.71	7.42	8.00	8.44	8.68	9.23	10.14	10.48	10.85	11.25	11.71
CCC/C	23.26	29.07	30.25	31.45	32.66	33.86	36.26	38.72	38.72	38.72	38.72	38.72	38.72	38.72	38.72
Investment grade	0.09	0.24	0.42	0.61	0.79	0.96	1.11	1.24	1.36	1.45	1.54	1.60	1.67	1.74	1.82
Speculative grade	1.90	3.19	4.29	5.06	5.77	6.65	7.53	8.33	8.96	9.48	10.22	10.63	10.85	11.10	11.37
All rated	0.25	0.51	0.77	1.01	1.24	1.47	1.68	1.86	2.01	2.14	2.28	2.36	2.44	2.52	2.61
Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 39

Average cumulative default rates for insurance companies by rating modifier, 1981-2023 (%)
	--Time horizon (years)--
Rating	Y1	Y2	Y3	Y4	Y5	Y6	Y7	Y8	Y9	Y10	Y11	Y12	Y13	Y14	Y15
AAA	0.00	0.07	0.33	0.60	0.87	1.14	1.27	1.40	1.47	1.54	1.61	1.67	1.74	1.81	1.87
AA+	0.00	0.13	0.13	0.13	0.13	0.13	0.13	0.27	0.42	0.56	0.72	0.87	1.04	1.20	1.37
AA	0.05	0.10	0.26	0.64	0.97	1.25	1.48	1.72	1.96	2.08	2.20	2.33	2.46	2.59	2.73
AA-	0.04	0.17	0.25	0.39	0.53	0.72	0.82	0.92	1.03	1.14	1.20	1.20	1.20	1.20	1.20
A+	0.03	0.03	0.13	0.20	0.27	0.34	0.46	0.50	0.55	0.60	0.65	0.71	0.76	0.83	0.90
A	0.14	0.35	0.58	0.84	0.98	1.13	1.33	1.41	1.55	1.74	1.85	1.90	1.96	2.02	2.16
A-	0.09	0.22	0.35	0.46	0.60	0.76	0.92	1.05	1.05	1.10	1.27	1.33	1.40	1.40	1.40
BBB+	0.00	0.12	0.30	0.49	0.69	0.83	0.98	1.14	1.31	1.31	1.31	1.31	1.31	1.31	1.31
BBB	0.20	0.69	1.06	1.37	1.61	1.95	2.12	2.22	2.41	2.51	2.62	2.62	2.62	2.62	2.77
BBB-	0.44	1.00	1.47	1.83	2.20	2.33	2.46	2.73	3.02	3.17	3.17	3.17	3.56	4.00	4.00
BB+	0.79	1.40	2.04	3.14	4.28	5.72	7.26	7.80	8.37	8.99	9.64	10.00	10.00	10.00	10.00
BB	0.51	1.04	1.60	1.60	1.60	2.23	2.55	3.26	4.38	5.19	6.07	6.55	6.55	6.55	6.55
BB-	0.00	1.20	2.04	2.48	2.94	3.43	3.95	5.61	6.80	6.80	7.48	8.22	9.01	9.93	11.06
B+	2.21	4.55	7.42	8.30	8.77	8.77	8.77	8.77	8.77	10.04	11.40	12.12	12.90	13.75	14.67
B	1.11	1.82	2.83	3.67	4.29	5.32	5.71	6.62	7.17	7.17	7.88	7.88	7.88	7.88	7.88
B-	2.13	5.14	6.73	8.53	10.56	11.75	14.51	14.51	14.51	14.51	14.51	14.51	14.51	14.51	14.51
CCC/C	23.26	29.07	30.25	31.45	32.66	33.86	36.26	38.72	38.72	38.72	38.72	38.72	38.72	38.72	38.72
Investment grade	0.09	0.24	0.42	0.61	0.79	0.96	1.11	1.24	1.36	1.45	1.54	1.60	1.67	1.74	1.82
Speculative grade	1.90	3.19	4.29	5.06	5.77	6.65	7.53	8.33	8.96	9.48	10.22	10.63	10.85	11.10	11.37
All rated	0.25	0.51	0.77	1.01	1.24	1.47	1.68	1.86	2.01	2.14	2.28	2.36	2.44	2.52	2.61
Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Table 40

Time to default from original rating for global insurance defaulters, 1981-2023
Original rating	Defaults (no.)	Average time from original rating (years)*	Median time from original rating (years)	Standard deviation of time from original rating (years)
AAA	4	12.30	7.11	11.07
AA	11	13.37	9.97	8.87
A	20	7.41	6.84	4.02
BBB	15	7.49	6.58	4.65
BB	8	6.76	5.81	5.35
B	16	5.79	4.86	4.94
CCC/C	3	0.74	0.67	0.48
*Or Dec. 31, 1980, whichever is later. Sources: S&P Global Market Intelligence's CreditPro and S&P Global Ratings Credit Research & Insights.

Appendix II: Methodology And Definitions

This long-term corporate default and rating transition study uses the CreditPro database of long-term local currency issuer credit ratings. The analysis excludes public information ("pi") ratings and ratings based on the guarantee of another company or government entity. The 'pi' qualifier was used to indicate ratings that were based on an analysis of an issuer's published financial information, as well as additional information in the public domain. We discontinued use of 'pi' ratings as of December 2014.

We also do not include short-term issuer ratings. S&P Global Ratings does not require all issuers with rated debt to have an issuer credit rating. Therefore, if an issuer has rated debt but not an issuer credit rating, we assign a proxy rating so that the CreditPro corporate dataset accurately represents the complete universe of ratings. The local currency senior unsecured rating is the preferred debt-level rating used for the proxy because this rating is usually consistent with the issuer credit rating. In a small number of cases, we use the subordinated debt rating or the senior secured rating as the proxy.

An S&P Global Ratings issuer credit rating is a forward-looking opinion about an obligor's overall creditworthiness. This opinion focuses on the obligor's capacity and willingness to meet its financial commitments as they come due. It does not apply to any specific financial obligation because it does not consider the nature and provisions of any single obligation, its standing in bankruptcy or liquidation, statutory preferences, or the legality and enforceability of the obligation. Counterparty credit ratings, corporate credit ratings, and sovereign credit ratings are all forms of issuer credit ratings. Issuer credit ratings can be either long-term or short-term.

Our ongoing enhancement of the database used to generate this study could lead to outcomes that differ to some degree from those reported in previous studies. However, this poses no continuity problem because each study reports statistics back to Dec. 31, 1980. Therefore, each is self-contained and effectively supersedes all previous versions.

Issuers included in this study

This study analyzes the rating histories of 5674 financial institutions that S&P Global Ratings rated as of Dec. 31, 1980, or that were first rated between that date and Dec. 31, 2023. These include banks, nonbank financial institutions, and insurance companies around the world with long-term local currency ratings. Structured finance vehicles, public-sector issuers, and sovereign issuers are the subjects of separate default and transition studies, and we exclude them from this study.

In this study, we review the defaults, rating transitions, and ratings performance of financial services broadly, in the following sectors:

• Banks: bank holding companies, bank subsidiaries, savings and loans, credit unions, and government-related entities;
• Nonbank financial institutions (NBFIs): a loose grouping of highly diverse companies, including broker-dealers, asset managers, finance companies, financial market infrastructure companies, and other financial entities that share some common features; and
• Insurance: life insurance, health insurance, property/casualty insurance, reinsurance, bond insurance, mortgage insurance, insurance brokers, and title insurance, as well as insurance-related service providers.

We calculated default and transition rates based on the number of issuers in the sample period. The default rates we refer to as weighted averages in this study use the number of issuers at the beginning of each year as the basis for each year's weight.

To avoid overcounting, we exclude subsidiaries with debt that is fully guaranteed by a parent or with default risk that is considered identical to that of a parent. The latter are companies with obligations that are not legally guaranteed by a parent but that have operating or financing activities that are so inextricably entwined with those of the parent that it would be impossible to imagine the default of one and not the other. At times, however, some of these subsidiaries might not yet have been covered by a parent's guarantee, or the relationship that combines the default risk of parent and subsidiary might have come to an end or might not have begun. We included such subsidiaries for the period during which they had a distinct and separate risk of default.

Issuers with withdrawn ratings

S&P Global Ratings withdraws ratings when an entity's entire debt is paid off or when the program or programs rated are terminated and the relevant debt extinguished. For the purposes of this study, a corporate rating may also be withdrawn as a result of mergers and acquisitions. Others are withdrawn because of a lack of cooperation, particularly when a company is experiencing financial difficulties and refuses to provide all the information needed to continue surveillance on the ratings, or at the entity's request.

Definition of default

An obligor rated 'SD' (selective default) or 'D' (default) is in default on one or more of its financial obligations, including rated and unrated financial obligations, excluding hybrid instruments classified as regulatory capital or in nonpayment according to terms. An obligor is considered to be in default unless S&P Global Ratings believes that such payments will be made within five business days of the due date in the absence of a stated grace period, or within the earlier of the stated grace period or 30 calendar days.

A 'D' rating is assigned when S&P Global Ratings believes that the default will be a general default and that the obligor will fail to pay all or substantially all of its obligations as they come due. An 'SD' rating is assigned when S&P Global Ratings believes that the obligor has selectively defaulted on a specific issue or class of obligations but will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. S&P Global Ratings lowers its rating on an obligor to 'D' or 'SD' if the obligor is conducting a distressed exchange offer.

'R' (regulatory intervention) indicates that an obligor is under regulatory supervision owing to its financial condition. This does not necessarily indicate a default event, but during the period of regulatory supervision, the regulators may have the power to favor one class of obligations over others or to pay some obligations and not others. While the 'R' rating was in place during the many of the years covered in this study, it was removed from all ratings scales on July 5, 2019 (see "S&P Global Ratings Definitions," published June 9, 2023).

We deem 'D', 'SD', and 'R' issuer ratings to be defaults for the purposes of this study. A default is assumed to take place on the earliest of:

• The date S&P Global Ratings revised the rating(s) to 'D', 'SD', or 'R';
• The date a debt payment was missed;
• The date a distressed exchange offer was announced; or
• The date the debtor filed for, or was forced into, bankruptcy.

When an issuer defaults, it is not uncommon for S&P Global Ratings to subsequently withdraw the 'D' rating. For the purposes of this study, if an issuer defaults, we end its rating history at 'D'. If any defaulting entity reemerges from bankruptcy--or otherwise restructures its defaulted debt instruments, thereby reestablishing regular, timely payment of all its debts--we reenter this issuer into the database as a new entity. Its rating history after the default event is included in all calculations as entirely separate from its experience leading up to its earlier default.

Many practitioners use statistics from this default study to estimate the "probability of default" and "probability of rating transition." It is important to note that S&P Global Ratings' credit ratings do not imply a specific probability of default.

Regional definitions

Within this study, tables and charts often present specific geographic regions. Some countries can be included in multiple regions, and S&P Global Ratings does not have corporate ratings within every country. The regions covered in this study are:

U.S. and tax havens:  the U.S., Bermuda, and the Cayman Islands

Other developed:  Australia, Brunei Darussalam, Canada, Israel, Japan, Republic of Korea, New Zealand, and Singapore

Europe:  Austria, Belgium, British Virgin Islands, Bulgaria, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the U.K.

Emerging markets:

Asia-Pacific.  Bangladesh, Bhutan, China, Fiji, Hong Kong, India, Indonesia, Macao Special Administrative Region of China, Malaysia, Mongolia, Pakistan, Papua New Guinea, Philippines, Sri Lanka, Taiwan, Thailand, British Indian Ocean Territory, and Vietnam

EMEA (Europe, the Middle East, and Africa).  Angola, Armenia, Azerbaijan, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Cote d'Ivoire, Croatia, Cyprus, Egypt, Estonia, Gabon, Georgia, Ghana, Hungary, Jordan, Kazakhstan, Kenya, Kuwait, Latvia, Lebanon, Lithuania, Mauritius, Moldova, Montenegro, Morocco, Namibia, Nigeria, Oman, Poland, Qatar, Romania, Russia, Saudi Arabia, Slovakia, South Africa, Tunisia, Turkiye, Ukraine, United Arab Emirates, and Uzbekistan

Latin America and Caribbean.  Argentina, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Honduras, Jamaica, Mexico, Panama, Paraguay, Peru, Trinidad and Tobago, and Uruguay

Frontier markets:

Asia-Pacific.  Cambodia and Marshall Islands

EMEA.  Liberia, Syrian Arab Republic, and Togo

Latin America and Caribbean.  Aruba, Bahamas, Curacao, Netherlands Antilles (dissolved in 2010), Turks and Caicos Islands, and Venezuela

Calculations

Static pool methodology.  S&P Global Ratings Credit Research & Insights conducts its default studies on the basis of groupings called static pools. For the purposes of this study, we form static pools by grouping issuers (by rating category, for example) at the beginning of each year, quarter, or month that the database covers. Each static pool is followed from that point forward. All companies included in the study are assigned to one or more static pools. When an issuer defaults, we assign that default back to all of the static pools to which the issuer belonged.

We use the static pools to avoid certain pitfalls in estimating default rates, ensuring that default rates account for rating migration and can be calculated across multiperiod time horizons. Some methods for calculating default and rating transition rates might charge defaults against only the initial rating on the issuer, ignoring more recent rating changes that supply more current information. Other methods may calculate default rates using only the most recent year's default and rating data, which may yield comparatively low default rates during periods of high rating activity because they ignore prior years' default activity.

The pools are static in the sense that their membership remains constant over time. Each static pool can be interpreted as a buy-and-hold portfolio. Because errors, if any, are corrected by every new update and because the criteria for inclusion or exclusion of companies in the default study are subject to minor revisions as time goes by, it is not possible to compare static pools across different studies. Therefore, every update revises results back to the same starting date of Dec. 31, 1980, so as to avoid continuity problems.

Entities that have had ratings withdrawn--that is, revised to not rated--are surveilled with the aim of capturing a potential default. Because static pools only include entities with active ratings as of the beginning date of a given pool, we exclude companies with withdrawn ratings, as well as those that have defaulted, from subsequent static pools. If the rating on an entity is withdrawn after the start date of a particular static pool and the entity subsequently defaults, we will include it in that static pool as a default and categorize it in the rating category of which it was a member at that time.

For instance, the 1981 static pool consists of all companies rated as of 12:00:01 a.m. on Jan. 1, 1981. Adding those companies first rated in 1981 to the surviving members of the 1981 static pool forms the 1982 static pool. All rating changes that took place are reflected in the newly formed 1982 static pool through the ratings on these entities as of 12:00:01 a.m. on Jan. 1, 1982. We used the same method to form static pools for 1983-2023. From Jan. 1, 1981, to Dec. 31, 2023, a total of 5,509 first-time-rated financial services entities were added to form new static pools, while we excluded 329 defaulting companies and 3,311 companies that were no longer rated.

Consider the following example: An issuer is originally rated 'BB' in mid-1986 and is downgraded to 'B' in 1988. This is followed by a rating withdrawal in 1990 and a default in 1993. We would include this hypothetical company in the 1987 and 1988 pools with the 'BB' rating, which was the rating on the issuer at the beginning of those years. Likewise, it would be included in the 1989 and 1990 pools with the 'B' rating. It would not be part of the 1986 pool because it was not rated as of the first day of that year, and it would not be included in any pool after the last day of 1990 because the rating had been withdrawn by then. Yet each of the four pools in which this company was included (1987-1990) would record its 1993 default at the appropriate time horizon.

Default rate calculation.  We calculated annual default rates for each static pool, first in units and later as percentages with respect to the number of issuers in each rating category. We combined these percentages to obtain cumulative default rates for the 43 years the study covers (see chart 11 and tables 13-15, 22-23, 30-31, and 38-39).

Issuer-weighted default rates.  All default rates that appear in this study are based on the number of issuers rather than the dollar amounts affected by defaults or rating changes. Although dollar amounts provide information about the portion of the market that is affected by defaults or rating changes, issuer-weighted averages are more useful measures of the performance of ratings.

Average cumulative default rate calculation.  The cumulative default rates in this study average the experience of all static pools by first calculating marginal default rates for each possible time horizon and for each static pool, weight-averaging the marginal default rates conditional on survival (survivors being nondefaulters) and accumulating the average conditional marginal default rates. We calculated conditional default rates by dividing the number of issuers in a static pool that default at a specific time horizon by the number of issuers that survived (did not default) to that point in time. Weights are based on the number of issuers in each static pool. Cumulative default rates are one minus the product of the proportion of survivors (nondefaulters).

Transition analysis

Transition rates compare issuer ratings at the beginning of a period with ratings at the end of the period. To compute one-year rating transition rates by rating category, we compared the rating on each entity at the end of a particular year with the rating at the beginning of the same year. An issuer that remained rated for more than one year was counted as many times as the number of years it was rated. For instance, an issuer continually rated from the middle of 1984 to the middle of 1991 would appear in the seven consecutive one-year transition matrices from 1985 to 1991. If the rating on the issuer was withdrawn in the middle of 1991, it would be included in the column representing transitions to not rated ("NR") in the 1991 transition matrix. Similarly, if it defaulted in the middle of 1991, it would be included in the column representing transitions to 'D' in the 1991 one-year transition matrix.

All 1981 static pool members still rated on Jan. 1, 2023, had 43 one-year transitions, while companies first rated on Jan. 1, 2023, had only one. Table 6 displays the summary of one-year transitions in the investment-grade and speculative-grade rating categories in 2023. Each one-year transition matrix displays all rating movements between letter categories from the beginning of the year through year-end. For each rating listed in the matrix's leftmost column, there are nine ratios listed in the rows, corresponding to the ratings from 'AAA' to 'D', plus an entry for "NR" (see table 12).

The only ratings considered in these calculations are those on entities at the beginning of each static pool and those at the end. All rating changes that occur in between are ignored. For example, if an entity rated 'A' on Jan. 1, 2023, was downgraded to 'BBB' in the middle of the year and then upgraded to 'A' later in the year (with no other subsequent rating changes), this entity would be included only in the percentage of issuers that began the year at 'A' and ended the year at 'A'. This also applies to transition matrices that span longer time horizons. If an issuer defaults or if the issuer rating is withdrawn in the middle of the year, then it would be considered rated 'D' or not rated as of Dec. 31 of that particular year.

Multiyear transitions

Multiyear transitions were also calculated for periods of two up to 10 years. In this case, we compared the rating at the beginning of the multiyear period with the rating at the end. For example, three-year transition matrices were the result of comparing ratings at the beginning of the years 1981-2021 with the ratings at the end of the years 1983-2023. Otherwise, our approach was identical to that used for single-year transitions.

We calculated average transition matrices on the basis of the multiyear matrices just described. These average matrices are a true summary, the ratios of which represent the historical incidence of the ratings listed in the first column changing to the ones listed in the top row over the course of the multiyear period (see tables 10, 19, 27, and 35). Transition matrices that present averages over multiple time horizons are also calculated as issuer-weighted averages.

Rating modifiers

We use rating modifiers (plus and minus signs) to calculate upgrade and downgrade percentages, as well as the magnitude of rating changes, throughout this study. However, some transition tables may use full rating categories for practical reasons. In other words, the use of a rating category suggests that transitions to, for example, 'AA-' from 'AA' or to 'BBB-' from 'BBB+' are not considered to be rating transitions because the rating remained within the rating category.

Standard deviations

Many of the tables and charts in this study display averages of default rates, transition rates, and Gini ratios. Often these are issuer-weighted averages. Prior studies have shown that fluctuations in default rates and transitions can vary greatly depending on many circumstances specific to particular time frames, industries, and geographic regions. As a supplement to many of the averages and time series presented in this study, standard deviations are also shown to provide a gauge of the dispersion of data behind these averages.

Time sample

This update limits the reporting of default rates to the 15-year time horizon. However, we gathered the data for 43 years, and all calculations are based on the rating experience of that period. In addition, average default statistics become less reliable at longer time horizons as the sample size becomes smaller and the cyclical nature of default rates has a bigger effect on averages.

Appendix III: Gini Methodology

To measure relative ratings performance, we utilize the Lorenz curve as a graphical representation of the proportionality of a distribution, and we summarize this via the Gini coefficient. For this study, the Lorenz curve is plotted with the x-axis showing the cumulative share of issuers, arranged by rating, while the y-axis represents the cumulative share of defaulters, also arranged by rating. For both axes of the Lorenz curve, the observations are ordered from the low end of the ratings scale ('CCC'/'C') to the high end ('AAA').

As an example, if 'CCC'/'C' rated entities made up 10% of the total population of issuers at the start of the time frame examined (x-axis) and 50% of the defaulters (y-axis), then the coordinate (10, 50) would be the first point on the curve. If S&P Global Ratings' corporate ratings only randomly approximated default risk, the Lorenz curve would fall along the diagonal. Its Gini coefficient--which is a summary statistic of the Lorenz curve--would thus be zero. If corporate ratings were perfectly rank ordered so that all defaults occurred only among the lowest-rated entities, the curve would capture all of the area above the diagonal on the graph (the ideal curve), and its Gini coefficient would be 1 (see chart 25).

The procedure for calculating the Gini coefficients is illustrated in chart 25: Area B is bounded by the random curve and the Lorenz curve, while area A is bounded by the Lorenz curve and the ideal curve. The Gini coefficient is defined as area B divided by the total of area A plus area B. In other words, the Gini coefficient captures the extent to which actual ratings accuracy diverges from the random scenario and aspires to the ideal scenario.

Related Criteria

• Criteria | Insurance | General: Insurer Risk-Based Capital Adequacy--Methodology And Assumptions, Nov. 15, 2023
• S&P Global Ratings Definitions, June 9, 2023
• Criteria | Financial Institutions | Banks: Banking Industry Country Risk Assessment Methodology And Assumptions, Dec. 9, 2021
• Criteria | Financial Institutions | General: Financial Institutions Rating Methodology, Dec. 9, 2021
• Criteria | Insurance | General: Insurers Rating Methodology, July 1, 2019

Related Research

• Default, Transition, and Recovery: 2023 Annual Global Corporate Default And Rating Transition Study, March 28, 2024
• Public Sector Pension Investment Board, Jan. 17, 2024
• Research Update: Azerbaijan-Based Muganbank Downgraded To 'D/D' And Ratings Withdrawn After Central Bank Revokes License, Oct. 25, 2023
• Research Update: CNG Holdings Inc. Downgraded To 'SD' From 'CC' On Completed Distressed Debt Exchange, Aug. 16, 2023
• Global Banks Midyear Outlook 2023: Resilience Will Be Tested, July 20, 2023
• Research Update: Curo Group Holdings Corp. Downgraded To 'SD' From 'B-' On Completed Distressed Debt Exchange, May 18, 2023
• Global Insurance Credit Views: Strong Fundamentals, Pockets Of Risk, April 27, 2023
• Research Update: Silicon Valley Bank Rating Lowered To 'D' And SVB Financial Group Rating Lowered To 'CC'; Ratings Subsequently Withdrawn, March 10, 2023
• Research Update: Altisource Portfolio Solutions S.A. Downgraded To 'SD' From 'CC' On Completed Distressed Exchange, Feb. 22, 2023
• Research Update: Mexarrend Issuer Credit Rating Cut To 'D' From 'CC' On Failure To Make Debt Payment, Jan. 21, 2023

Credit Research & Insights:	Ekaterina Tolstova, Frankfurt +49 173 6591385; ekaterina.tolstova@spglobal.com
	Nick W Kraemer, FRM, New York + 1 (212) 438 1698; nick.kraemer@spglobal.com
Research Contributor:	Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Pune