A.M. Best Co. released ratings updates. The following are some of the most recent:

American Agri-Business Insurance Co.

A.M. Best Co. upgraded the FSR to A (Excellent) from A- (Excellent) and ICR to “a” from “a-” of American Agri-Business Insurance Co. The outlook for both ratings is stable.

These rating actions follow the state approval of a 100% quota share agreement with AA-BIC and the affiliated pool, Endurance American Insurance Co. (EAIC) (Wilmington, DE). AA-BIC benefits from its strong level of overall capitalization, prudent reinsurance protection and management’s extensive experience with the federally subsidized multiple peril crop insurance (MPCI) program.


Clarendon Insurance Group and its Members

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Clarendon Insurance Group and its members. The outlook for all ratings is stable.

The ratings assume an orderly administration of Clarendon’s outstanding liabilities on its discontinued business, while also reflecting the projected cash flows and capital supporting these obligations. The ratings also reflect the continued explicit support provided by Clarendon’s ultimate parent, Hannover Rueckversicherung AG, as evidenced by the reinsurance cover that went into effect on July 1, 2005, coinciding with an organizational restructuring.


Commercial Casualty Insurance Co.

A.M. Best Co. upgraded and removed from under review the FSR to B+ (Good) from B- (FAIR) and the ICR to “bbb-” from “bb-”of Commercial Casualty Insurance Co. The outlook assigned to the ratings is stable.

The ratings had been placed under review with positive implications following the announced asset exchange agreement between Berkshire Hathaway Inc. and White Mountains Insurance Group Ltd. Under the terms of this agreement, Berkshire announced that it would exchange its ownership in White Mountains for asset considerations, which included CCIC. Effective Oct. 31, 2008, CCIC became an indirect wholly owned subsidiary of Berkshire.


Continental American Insurance Co.

A.M. Best Co. upgraded the FSR to A- (Excellent) from B++ (Good) and ICR to “a-” from “bbb+” of Continental American Insurance Co. The outlook for both ratings has been revised to stable from positive.

The rating upgrades reflect Continental American’s continued favorable operating earnings and consistent growth of surplus and sales in recent years, according to the rating agency. Continental American has demonstrated increased direct sales and premiums while moderating the amount of business written though joint ventures. Additionally, the company has made good progress in diversifying its product mix, expanding geographically into additional states and writing business over a number of different industries by utilizing an increased number of marketing organizations.


Elwood Insurance Ltd.

A.M. Best Co. revised the outlook to positive from stable and affirmed the FSR of B++ (Good) and ICR of “bbb” of Elwood Insurance Ltd.

Elwood’s ratings recognize its excellent capitalization level, history of positive operating performance, conservative loss reserving practices and effective management of exposures. Over the past five years, return on surplus has averaged 22.7%, while surplus levels have increased at a compound annual growth rate of 21.9% through the accumulation of net profits.


Generali USA Life Reassurance Co.

A.M. Best Co. affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a” of Gen erali USA Life Reassurance Company (Generali USA) (Kansas City, Missouri). The outlook for both ratings is stable.

Generali USA is the U.S. life reinsurance subsidiary of the multi-national life and non-life insurance writer, Assicurazioni Generali S.p.A. The ratings reflect the solid risk-adjusted capitalization of Generali USA, its profitable operations, continued growth in the U.S. life reinsurance market and the stability of the company’s investment portfolio. Generali USA is a well-regarded industry participant and continues to increase its ordinary life line of business despite the contraction of life insurance sales and consolidation within the life reinsurance marketplace. The company has been able to win new ordinary life accounts while retaining most existing relationships. As a result, the company currently enjoys a solid mid-market position as a reinsurer. The retrocession support provided by Generali also benefits the ratings.

HSBC Finance Corp.’s North American Insurance Companies

A.M. Best Co. downgraded the financial strength rating (FSR) to A (Excellent) from A+ (Superior) and issuer credit ratings (ICR) to “a” from “aa-” of Household Life Insurance Co., its wholly owned subsidiary, First Central National Life Insurance Co. of New York and HSBC Insurance Co. of Delaware, a property/casualty affiliate (collectively known as HSBC Insurance). These insurance companies represent the primary North American operating entities of HSBC Finance Corp. The outlook for all ratings has been revised to stable from negative.

The rating actions reflect the loss of HSBC Insurance’s primary distribution channel for its core credit insurance products in the United States, its declining operating results in recent years and noticeable decline in premiums in its core credit life and credit accident and health product lines over the most recent period.


Humana Inc. and its Flagship Insurance Subsidiaries

A.M. Best Co. affirmed the FSR, ICR and debt ratings of the majority of insurance and HMO subsidiaries of Humana Inc. as well as the ICR of “bbb-” of Humana. The outlook for these ratings is stable.

Concurrently, A.M. Best has assigned an FSR of B++ (Good) and an ICR of “bbb” to Humana AdvantageCare Plan and an FSR of B++ (Good) and ICRs of “bbb+” to Cariten Health Plan Inc. and Cariten Insurance Co. The outlook assigned to these ratings is stable.

A.M. Best also has upgraded the FSR to A- (Excellent) from B++ (Good) and ICR to “a-” from “bbb+” of Humana Health Benefit Plan of Louisiana, Inc. (Metairie, LA). The outlook for these ratings is stable.

In addition, A.M. Best has revised the outlook to stable from negative and affirmed the FSR of B+ (Good) and ICRs of “bbb-” of Humana Insurance of Puerto Rico Inc. and Humana Health Plans of Puerto Rico Inc.

At the same time, A.M. Best has downgraded the FSR to B++ (Good) from A- (Excellent) and the ICR to “bbb+” from “a-” of Kanawha Insurance Co. The outlook for both ratings has been revised to stable from negative.

Additionally, A.M. Best has assigned indicative debt ratings of “bbb-” to senior unsecured debt, “bb+” to subordinated debt and “bb” to preferred stock, which may be issued under Humana’s recently filed shelf registration statement. The outlook assigned to these ratings is stable. All companies are insurance or HMO subsidiaries of Humana.

These rating actions reflect Humana’s strong premium growth, national product offerings and good operating results, according to A.M. Best. Humana’s premiums continue to grow driven by the company’s Medicare Advantage products. Humana has expanded its product offering on a national basis mainly through its Medicare Ad vantage product offerings and has continued to grow its products portfolio in targeted geographic regions. Humana has consistently reported positive operating and net income results.


Prime Insurance Group and its Members

A.M. Best Co. placed the FSR of B++ (Good) and ICR of “bbb” of Prime Insurance Group and its members, Prime Insurance Co. and Prime Insurance Syndicate Inc. under review with negative implications.

These rating actions are in response to the excessive financial leverage at the parent company, Prime Holdings Insurance Services Inc., and the uncertainty related to the parent’s ability to raise capital, which is currently underway. The under-review status also considers the inherent risk in any major transaction as respects to change in controlling ownership.


Prudential Financial Inc.’s Senior Notes

A.M. Best Co. assigned debt ratings of “a-” to Prudential Financial Inc.’s (PFI) newly issued senior unsecured notes. The securities were issued in two tranches: $250 million of 5.5-year 6.2% notes and $750 million of 10-year 7.375% notes. Concurrently, A.M. Best has assigned indicative ratings of “a-” to senior debt, “bbb+” to subordinated debt, “bbb” to trust preferred securities and “bbb” to preferred stock, all of which may be issued under PFI’s recently re-filed shelf registration. The outlook assigned to all ratings is negative. The ratings on PFI’s domestic life/health insurance companies and existing debt securities are unchanged.

The proceeds from the debt issuance are expected to be used for general corporate purposes including making loans and capital contributions to PFI’s affiliates. The recent $1.25 billion equity raise combined with the $1 billion debt offering significantly enhanced PFI’s financial flexibility and has only a minor impact on the group’s financial leverage, which is within A.M. Best’s guidelines for the current ratings. A.M. Best notes that PFI’s increased usage of operating leverage over the past several years (though recently reduced) coupled with dampened operating earnings has resulted in reduced fixed charge coverage.


Stonetrust Commercial Insurance Co.

A.M. Best Co. revised the outlook to positive from stable and affirmed the FSR of B+ (Good) and ICR of “bbb-” of Stonetrust Commercial Insurance Co.

These rating actions reflect Stonetrust’s solid capitalization, profitable earnings achieved through strong underwriting performance and growing investment income and management’s underwriting experience within its niche workers’ compensation marketplace.


The Northwestern Mutual Life Insurance Co. and its Subsidiary

A.M. Best Co. affirmed the FSR of A++ (Superior) and ICR of “aaa” of The Northwestern Mutual Life Insurance Co. and its subsidiary, Northwestern Long-Term Care Insurance Co. The outlook for both ratings is stable.

The ratings reflect Northwestern Mutual’s sizable and mature individual life insurance franchise, conservative operating profile, strong operating performance and superior risk-adjusted capitalization. The ratings also recognize the loyalty and productivity of the Northwestern Mutual Financial Network, its exclusive distribution system, as well as the competitive advantages derived from historically favorable investment, expense, persistency and mortality experience in its core business lines. These advantages allow the company to consistently provide policy owners with dividend rates that are among the industry’s highest, further contributing to the company’s excellent persistency and leadership position in the individual life insurance market.

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