American Federated Insurance Co.
A.M. Best upgraded the financial strength rating (FSR) to B++ (good) from B+ (good) and issuer credit rating (ICR) to “bbb” from “bbb-” of American Federated Insurance Co. (AFIC).
Concurrently, A.M. Best affirmed the FSR of B+ (good) and ICR of “bbb-” of American Federated Life Insurance Co. (AFLIC). The outlook for all ratings is stable.
The ratings of AFIC reflect its solid risk-adjusted capitalization and historically consistent and profitable underwriting and operating performance, A.M. Best says. These positive factors are derived from the company’s extensive experience and specialized niche writing collateral protection insurance on personal loans issued by its immediate parent, First Tower Corp. and First Tower’s consumer finance subsidiaries.
A.M. Best downgraded the FSR to A (excellent) from A+ (superior) and ICR to “a+” from “aa-” of Church Mutual Insurance Co. The outlook for both ratings has been revised to stable from negative.
The rating actions reflect what A.M. Best contends is the sharp decline in Church Mutual’s reported underwriting performance in 2008, 2009 and through first-quarter 2010, driven primarily by competitive market conditions and significant catastrophe-related losses recorded in these years. As a result, Church Mutual’s underwriting results and operating performance measures have deteriorated to levels that are no longer reflective of a Superior-rated company, the rating agency says.
A.M. Best affirmed the FSR of A (excellent) and ICR of “a” of Gerber Life Insurance Co. The outlook for both ratings is negative.
Gerber Life is a wholly owned subsidiary of Nestlè Insurance Holdings Inc., which is a unit of Nestlè, S.A., a food and beverage conglomerate with operations in almost every country around the world.
The affirmation of Gerber Life’s ratings primarily reflects its solid risk-adjusted capitalization and good earnings diversity through its stable inforce block of ordinary life insurance and profitable medical stop-loss insurance business, A.M. Best says. The rating agency also notes that Gerber Life’s statutory operating results have improved over the most recent period, and have been regularly impacted by increased marketing and acquisition costs, as well as other one-time items associated with its divestiture from Novartis.
A.M. Best affirmed the FSR of A (excellent) and ICR of “a” of The Hanover Insurance Group Property and Casualty Companies and its members. Additionally, A.M. Best affirmed the ICR of “bbb”, debt ratings of “bbb” for senior debt and “bb+” for junior subordinated debt of the publicly traded holding company, The Hanover Insurance Group Inc. (THG). The outlook for all ratings is stable.
The ratings reflect The Hanover’s excellent risk-adjusted capitalization, stemming from improved operating earnings, the rating agency says. In recent years, The Hanover has sustained profitability and increased surplus through improved underwriting performance and favorable reserve development. In addition, the ratings reflect prudent risk management, improved business mix in personal and commercial lines and robust product offerings in The Hanover’s commercial lines segment. The ratings also recognize the improved financial leverage and financial flexibility at THG in recent years.
Moody's affirmed the debt ratings of Lincoln National Corp. (senior debt at Baa2) and the A2 insurance FSRs of its operating subsidiaries, and changed the outlook to stable from negative.
Moody's said the affirmation of LNC's ratings and the change in outlook to stable primarily reflects the improvement in the company's financial flexibility and stabilization of its business profile. The rating agency also noted that LNC's business profile remains sound as demonstrated by its improved first quarter 2010 sales and positive net flows.
A.M. Best upgraded the ICR to “a+” from “a” and affirmed the FSR of A (excellent) of Mutual Insurance Company of Arizona (MICA). The outlook for both ratings is stable.
The ratings reflect MICA’s excellent risk-adjusted capitalization, long-term operating profitability, historical investment returns and leadership position as a provider of medical professional liability insurance to physicians in the company’s home state of Arizona, A.M. Best says.
The ratings also take into account the company’s commitment to reserve adequacy, pricing and expense management.
A.M. Best downgraded the FSR to B++ (good) from A- (excellent) and ICR to “bbb+” from “a-” of National Farm Life Insurance Co. The outlook has been revised to stable from negative.
A.M. Best says the rating actions reflect National Farm’s weakened risk-adjusted capitalization, the challenging business environment, which has led to a decline in new business, investment losses reported during the last two years and the potential for further investment impairments given the company’s continued unrealized investment loss position.
National Farm’s risk-adjusted capital levels have declined relative to higher historical levels, and absolute total capital has been flat over the latest five-year period, the rating agency says. At year-end 2009, National Farm’s level of below investment grade securities was elevated, representing over half of its total capital, while real estate exposure through direct mortgage loans was approximately three-quarters of surplus.
A.M. Best affirmed the FSR of A- (excellent) and the ICR of “a-” of PrismaLife AG. The outlook for both ratings is stable.
The ratings reflect PrismaLife’s niche business position as a specialist insurer for unit-linked life insurance, its good earnings and strong risk-adjusted capitalization, A.M. Best says. The rating agency believes that PrismaLife has a niche business position as a unit-link life insurer and expects gross written premiums to increase by approximately 25%-30% to EUR 230-240 million in 2010 (EUR 181 million in 2009), outperforming its competitors in its target markets, due to its attractive products and dynamic distribution network.
Fitch Ratings maintains Prudential Plc Long-term issuer default rating of 'AA-' and other ratings on rating watch negative following American International Group Inc.'s (AIG) (LT IDR 'BBB'/rating watch evolving) rejection of Prudential's proposed revisions to its offer for AIA Group Ltd., the Asian subsidiary of AIG. The rating agency also maintains the rating watch negative on the ratings of Prudential's subsidiaries.
S&P lowered its counterparty credit and FSRs on the operating insurance companies of State Auto Group to 'A-' from 'A'. At the same time, the rating agency lowered its counterparty credit rating on State Auto Financial Corp. to 'BBB-' from 'BBB'. The outlook on all of the ratings is stable.
The rating actions reflect the recent substantial decline in earnings, the deterioration of non-catastrophe underwriting performance and the negative impact on the overall group's performance of some strategic decisions, S&P says.
Westpac Lenders Mortgage Insurance Ltd.
S&P assigned its 'AA-' insurer financial strength and counterparty credit ratings to Westpac Lenders Mortgage Insurance Ltd. (WLMI). The ratings reflect the strong operational and financial linkages with ultimate parent, Westpac Banking Corp. (WBC, AA/stable/A-1+). WLMI fulfils one of the bank's key risk-transfer strategies as its captive lender's mortgage insurer (LMI).
S&P assessed WLMI as a strategically important subsidiary of WBC, and its ratings have benefited from this status. The outlook on the ratings is stable.
WLMI has operated as WBC's captive LMI since it was established in 1996, and now operates as a sister company to St. George Insurance Australia Pty. Ltd. (SGIA, AA-/stable/--). As part of the merger of WBC and St. George Bank Ltd., the two LMIs have operated under the same management and division. S&P’s assessment of strategic importance is based on: the Westpac name association and length of ownership; WLMI's role in accepting transfer of mortgage credit risk from the bank; WLMI's contribution to group profitability; the benefit of additional LMI underwriting in the risk acceptance process; WLMI's very strong financial structure; and expressions to the Australian Prudential Regulation Authority of capital support from the parent.
