A.M. Best, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s (S&P) released ratings updates.

The following are some of the most recent:


Alleghany Corp.

Moody's affirmed the Baa2 long-term issuer rating of Alleghany Corp. and the A3 insurance financial strength (IFS) rating of Landmark American Insurance Co. The outlook for the ratings remains stable. Alleghany Corp. is a holding company that primarily focuses on property/casualty insurance through its various subsidiaries. Landmark American and RSUI Indemnity Co. (RIC) comprise the RSUI Group Inc. (RSUI)—Alleghany's most significant insurance operation. The IFS rating on Landmark American reflects the credit profile of RSUI Group Inc. as a whole, given that the company is substantially reinsured by RIC.

According to Moody's, the A3 IFS rating is based on RSUI's sound capitalization and profitable underwriting track record (notwithstanding catastrophe-induced volatility), the absence of debt service requirements at the holding company that enables the operating subsidiaries to retain a greater proportion of their earnings than most industry peers, and the availability of holding company assets to support the existing operations and/or future acquisitions. The rating agency has also considered Alleghany's other insurance operations aside from RSUI [most notably Capitol Transamerica and Pacific Compensation Insurance (formerly Employers Direct); both unrated by Moody's] in its assignment of the Baa2 long-term issuer rating of Alleghany.


Allianz Argentina

Moody's Latin America affirmed Allianz Argentina's IFS ratings at Ba3 global local currency (GLC) and Aa2.ar on the Argentine national scale. In the same action, Moody's changed the ratings outlook to positive from stable.

The change in the rating outlook to positive for Allianz Argentina primarily reflects the improving trend in its financial fundamentals, particularly its asset quality and capitalization, Moody’s says. Allianz Argentina has been consistently reducing its exposure to high-risk assets, allocating a greater portion of investments to U.S. Treasury bills, in addition to other high-rated corporate bonds and fixed income assets. It has also improved its capitalization, with a consistently high level of capital cushion above local solvency margins.


Ariel Holdings Ltd. and its subsidiaries

A.M. Best Co. affirmed the financial strength rating (FSR) of A- (excellent) and issuer credit ratings (ICR) of “a-” of Ariel Reinsurance Co. Ltd. (Ariel Re), Valiant Insurance Co. (Valiant) and Valiant Specialty Insurance Co. (Valiant Specialty). Concurrently, A.M. Best affirmed the ICR of “bbb-” of Ariel Holdings Ltd. (Ariel). The outlook for the ratings of Ariel Re and Ariel is stable, while the outlook for the ratings of Valiant and Valiant Specialty has been revised to negative from stable.

The ratings of Ariel and Ariel Re reflect the supportive level of risk-adjusted capitalization and operating performance since their inception, as well as the continued development of Ariel’s business profile. The ratings also recognize the benefits derived from the diversification of the group’s operating platforms and the extensive experience of the management team, according to A.M. Best.


Challenger Life Co. Ltd.

Fitch Ratings affirmed Challenger Life Co, Ltd.'s IFS rating at 'A-'. The outlook is stable.

The rating reflects Challenger's strong level of capitalization, which, having strengthened following capital injections over the past 18 months, provides the company with considerable flexibility for future growth opportunities, according to Fitch. Lower debt levels within Challenger’s controlled property trusts have positively impacted the company’s financial leverage ratios, the rating agency says.


FPIC Insurance Group Inc. and its subsidiaries

A.M. Best Co. affirmed the FSR of A- (excellent) and ICR of “a-”of FPIC Insurance Group (FPIC) and its members. A.M. Best also affirmed the ICR of “bbb-” of FPIC’s parent, FPIC Insurance Group Inc. Concurrently, A.M. Best affirmed the FSR of A- (excellent) and ICR of “a-”of FPIC Insurance Group Inc.’s separately rated subsidiary, Advocate, MD Insurance of the Southwest Inc. (Advocate, MD). The outlook for all ratings is stable.

The ratings of FPIC reflect its excellent risk-adjusted capitalization, specialty expertise and management’s extensive understanding of the Florida market and regulatory and judicial environment, the rating agency says. These strengths, coupled with favorable loss cost trends, have enabled FPIC to produce favorable operating results on an annual basis since 2002.


Grain Dealers Mutual Insurance Co.

A.M. Best Co. upgraded the FSR to A (excellent) from B+ (good) and ICR to “a” from “bbb-” of Grain Dealers Mutual Insurance Co. The outlook for both ratings has been revised to stable from positive.

The upgrading of Grain Dealers Mutual’s ratings is a result of it becoming a fully reinsured affiliate of NGM Insurance Co. (NGM) via a 100% quota share agreement effective Jan. 1, 2010, the rating agency says. Because Grain Dealers Mutual is affiliated with NGM, it became a member of the Main Street America Group.


Missouri Employers Mutual Insurance Co. 

A.M. Best Co. revised the outlook to stable from positive and affirmed the FSR of A- (excellent) and ICR of “a-” of Missouri Employers Mutual Insurance Co. (MEM).

The revised outlook reflects the recent moderate deterioration in MEM’s underwriting performance and A.M. Best’s expectation for continued weaker underwriting results over the near term. The downturn in underwriting performance is reflective of ongoing competitive market conditions and modest adverse loss reserve development in 2002 and prior accident years, the rating agency says.

Despite the revised outlook, the affirmation of the ratings reflects MEM’s strong overall capitalization, historic track record of recording solid operating earnings and dominant position in the Missouri workers’ compensation market, according to A.M. Best.


National Security Group and its member

A.M. Best Co. affirmed the FSR of B++ (good) and ICR of “bbb” of National Security Group (National Security) and its member, National Security Fire and Casualty Company. A.M. Best also has affirmed the ICR of “bb” of National Security’s parent company, The National Security Group Inc. The outlook for these ratings is negative.

Additionally, A.M. Best affirmed the FSR of B+ (good) and ICR of “bbb-” of National Security’s wholly owned subsidiary, Omega One Insurance Company Inc. Concurrently, A.M. Best upgraded the ICR to “bb+” from “bb” and affirmed the FSR of B (fair) of the life/health company, National Security Insurance Co. (NSIC). The outlook for these ratings is stable.

The ratings of National Security reflect its adequate risk-adjusted capitalization and well-established niche position as a provider of dwelling/fire coverage, A.M. Best says.


Ohio National Financial Services Inc.

Moody’s and S&P assigned ratings to Ohio National Financial Services Inc.'s proposed $300 million senior note issuance. Moody's Investors Service has assigned a Baa1 senior debt rating to 10-year fixed rate senior unsecured notes. The outlook for the rating is stable. S&P assigned its 'A' rating on the senior note issuance. Both rating agencies expect Ohio National to use a portion of the debt proceeds to prefund all of the $157.5 million of outstanding 7% senior notes coming due in 2011.

The remaining proceeds are expected to be used for general corporate purposes, including potentially as a capital contribution to the company's life insurance operating subsidiaries.


Unitrin Inc.

Moody's affirmed the Baa3 senior debt ratings of Unitrin Inc. and the A3 IFS ratings of its lead property/casualty and life insurance subsidiaries, respectively, Trinity Universal Insurance Co. and United Insurance Company of America. In the same rating action, Moody's changed the rating outlook to stable from negative reflecting meaningfully improved financial results in 2009 and the stabilization of the group's financial flexibility and liquidity position.

The change to a stable outlook reflects improved financial flexibility at the parent company and the orderly wind down of its Fireside Bank subsidiary (in run-off since March 2009), Moody’s says. Trinity has also taken actions to strengthen its capital adequacy by reducing catastrophe exposure in high-risk zones. In addition, Moody’s says Unitrin has significantly improved the quality of its investment portfolio across its operating units, in particular, by substantially reducing the size and concentration of its equity holdings, which represented 4.5% of invested assets at year-end 2009.


Universal American Corp. and its primary insurance subsidiaries

A.M. Best Co. revised the outlook to stable from negative and affirmed most of the FSR and ICR of the primary insurance subsidiaries of Universal American Corp., as well as all debt ratings on the shelf registration of Universal American. 

The rating affirmations reflect Universal American’s established position in the U.S. senior health insurance market, positive operating performance and strengthened capitalization, A.M. Best says. Universal American currently serves more than 1.9 million Medicare members. Universal American’s Medicare Advantage Private Fee for Service (PFFS) and Medicare Prescription Drug Part D (PDP) products primarily drove enrollment growth for the organization. The rating agency believes Universal American continues to generate positive operating and net income results, with over $140 million of net income reported in 2009.

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