American International Life Assurance Company of New York
All four rating agencies withdrew ratings of AIG subsidiary, American International Life Assurance Company of New York, following the announcement of it merging into affiliate company, United States Life Insurance Company in the City of New York.
A.M. Best Co. has withdrawn the financial strength rating (FSR) of A (excellent) and issuer credit rating (ICR) of “a”; Fitch Ratings has withdrawn the 'A-' insurer financial strength (IFS) rating; Moody's Investors Service has affirmed and withdrawn the A1 insurance financial strength (IFS) rating. Standard & Poor's Ratings Services affirmed its 'A+' financial strength rating and negative outlook and withdrew the rating.
A.M. Best affirmed the financial strength rating of A (excellent) and the issuer credit rating of “a” of the subsidiaries of American Safety Insurance Holdings Ltd. (ASI): American Safety Casualty Insurance Co., American Safety Indemnity Co., American Safety Reinsurance Ltd. and American Safety Risk Retention Group Inc., which is reinsured by and shares common management with the related companies. A.M. Best also affirmed the ICR of “bbb” of ASI. The outlook for all ratings is stable.
The ratings are based on the consolidated financial condition and operating performance of the entities comprising ASI. The ratings reflect the consolidated group’s excellent capitalization, solid overall operating results and effective management of its insurance operations, A.M. Best says. The ratings also recognize the group’s underwriting expertise and discipline in its niche markets with customized risk management programs and loss control services.
A.M. Best placed under review with developing implications the financial strength rating (FSR) of B++ (good) and issuer credit rating (ICR) of “bbb+” of Countryway Insurance Co.
These rating actions are due to the Jan. 6, 2011 announcement that Virginia Farm Bureau Mutual Insurance Co. (VAFB) intends to purchase Countryway from United Farm Family Mutual Insurance Co. (UFFM).
The capitalization of Countryway is not expected to improve significantly as a result of this transaction; however, the ratings could be favorably affected by the financial strength of VAFB and its intention to put in place an intercompany pooling agreement between VAFB and Countryway, the rating agency says.
The ratings will remain under review pending the close of the transaction, which carries some execution risk, and A.M. Best’s complete analysis of VAFB, the company and the specific level of support that VAFB intends to provide the company in the long term.
Fitch Ratings affirmed Hannover Rueckversicherung AG's (Hannover Re) and its reinsurance subsidiary E+S Rueckversicherung AG's (E+S Re) insurer financial strength (IFS) ratings at 'A+' and Hannover Re's issuer default rating (IDR) at 'A+'. All ratings have stable outlooks.
Fitch has simultaneously affirmed Hannover Finance (Lux) S.A.'s EUR500m subordinated notes, due in 2040, US$750 million subordinated notes, due in 2024, and EUR500m perpetual subordinated notes at 'A-'. All issues are guaranteed by Hannover Re on a subordinated basis.
The affirmation reflects strong earnings achieved in the first nine months of 2010 despite the burden of large losses relating to natural catastrophes and man-made losses driving the combined ratio up to 99.0% at Q310 (96.8% at Q309). The affirmation also reflects that Fitch's expectations regarding Hannover Re's net income in 2010 and growth in shareholders' funds have been exceeded.
While Fitch expects soft pricing in some lines of business and reduced levels of investment income to create further earnings pressure in 2011, the agency believes that Hannover Re will continue to focus on its profitability targets, which should avoid major deterioration in underwriting profitability during the cycle.
Fitch Ratings affirmed New York Life Insurance Co.'s (New York Life) insurer financial strength (IFS) rating at 'AAA' along with all other ratings on New York Life and its wholly owned insurance subsidiaries (see complete list below). The rating outlook is stable.
New York Life's ratings are based on the company's very strong capital, well-diversified investment portfolio, consistently solid operating earnings driven by its large book of traditional life insurance reserves and a leading position in the U.S. life insurance and annuity markets. Fitch views New York Life's effective execution of its strategy to distribute products primarily through a career distribution channel targeting middle-market customers as a ratings strength and has allowed the company to market its lower-risk products in a controlled and effective fashion.
New York Life reported an 11% growth in total adjusted capital for the first nine months of 2010 and favorable comparisons in terms of greater operating income and declining investment related losses for the first nine months of 2010 versus 2009. New York Life's reported investment losses through the first nine months of 2010 have been below Fitch's core stress. Fitch views the company's investment loss exposure relative to capital and earnings as favorable compared to industry peers.
New York Life has reported strong sales of life insurance, income annuity products and mutual funds through the first nine months of 2010. The company's career agency channel was the key driver of individual life insurance and income annuity sales, while Fitch views New York Life's third-party distribution channel as an important driver for fixed annuities and mutual funds products.
Moody's affirmed the Aa1 insurance financial strength (IFS) ratings of State Farm Life Insurance Co. (State Farm Life) and its affiliate, State Farm Life and Accident Assurance Co. (collectively, State Farm Life). Both companies are wholly owned subsidiaries of State Farm Mutual Automobile Insurance Co. (not rated by Moody's). The outlook for State Farm Life's ratings is stable.
Moody's Aa1 insurance financial strength (IFS) ratings of State Farm Life are based on the company's large, profitable block of participating life insurance policies, its strong asset quality, and superior capital adequacy, as measured by NAIC Risk-Based Capital Ratios (RBC) over 700% as of year-end 2009. Moody's expects the company's RBC ratios to remain superior at year-end 2010, as well.
Moody’s contends State Farm Life weathered the financial and credit crisis of 2008-2009 extremely well relative to its peers, given its avoidance of higher-risk structured housing-related investments (e.g., subprime RMBS, and Alt-A), as well as equity-sensitive products, such as variable annuities. The brand, distribution and other benefits of ownership by State Farm Mutual are additional credit positives, according to Moody’s.
A.M. Best affirmed the financial strength rating (FSR) of A++ (superior) and issuer credit ratings (ICR) of “aa+” of Tokio Marine & Nichido Fire US Group (US Group) and its members. The US Group is comprised of the U.S. Branch of Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF) and its three wholly owned reinsured subsidiaries: TM Casualty Insurance Co., TM Specialty Insurance Co. and Trans Pacific Insurance Co.
Additionally, A.M. Best affirmed the FSR of A (excellent) and ICR of “a” of TNUS Insurance Co. (TNUS). The outlook for all ratings is stable.
The ratings of the US Group reflect the status of the U.S. Branch of TMNF and the critical role it plays as part of TMNF’s global strategy, A.M. Best says. The primary focus of the US Group’s strategy is to support the insurance needs of TMNF’s clients that are doing business in the United States. The ratings also reflect the strong risk-adjusted capitalization and excellent overall earnings of the US Group.
The ratings for TNUS recognize its low underwriting leverage and the extensive support provided by TMNF, which is offset by its transitioning business profile. Beginning in 2010, TNUS is being used as a direct writer of preferred workers’ compensation business.
Tokio Marine Pacific Insurance Limited
A.M. Best affirmed the financial strength rating of A+ (superior) and issuer credit rating of “aa-” of Tokio Marine Pacific Insurance Limited (TMPI). The outlook for both ratings is stable.
The ratings reflect TMPI’s consistent growth in surplus and dominant position in the group accident and health sector in Guam. The ratings also consider the explicit support from its parent company, Tokio Marine & Nichido Fire Insurance Co. Ltd., in the form of a financial guarantee and reinsurance as well as the catastrophe modeling.
Except for its first year of operation, TMPI has recorded positive underwriting results, which contributed to its surplus growth in 2009.
A.M. Best placed under review with positive implications the financial strength rating (FSR) of B++ (good) and issuer credit rating (ICR) of “bbb+” of Western Life Assurance Company (WLA). At the same time, A.M. Best placed under review with positive implications the FSR of B+ (good) and ICR of “bbb-” of WLA’s affiliate, Western Financial Insurance Co. (WFIC).
The rating actions follow the announcement that Western Financial Group Inc. (Western Financial), the ultimate parent of WLA and WFIC, has entered into a support agreement to be acquired by Desjardins Financial Group (Desjardins). Through this offer, Desjardins will acquire all of the issued and outstanding common shares of Western Financial at a price of CAD 4.15 per common share in cash, for a total transaction value of CAD 443 million
The under review status reflects WLA and WFIC’s potential for enhancement in their ratings and/or outlook based on the greater financial flexibility and business profile of Desjardins. The outcome of A.M. Best’s review will follow further discussions with the management teams of both Western Financial and Desjardins and the close of the transaction. These discussions would include reviews of updated strategic plans and financial projections for WFL and WFIC and an understanding of their roles under the new ownership.
S&P affirmed its 'A' counterparty credit and financial strength ratings and stable outlook on XL Life Insurance and Annuity Co. (XLLIAC). S&P subsequently withdrew the ratings at the company's request. XLLIAC previously underwrote funding agreement business that was placed into runoff in May 2007. This business was supported by a substantial quota share to an XL affiliate with reinsured liabilities collateralized by a segregated U.S. trust that is guaranteed by a core operating subsidiary of XL. As of Sept. 30, 2010, XLLIAC had no funding agreement or other insurance liabilities.
