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:


American Capital Assurance Group and its members

A.M. Best Co. upgraded the issuer credit ratings (ICR) to “bbb+” from “bbb,” revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of B++ (good) of American Capital Assurance Group (ACA) and its members.

The ratings reflect ACA’s profitable underwriting performance in the Florida small commercial and homeowners markets, as well as its solid risk-adjusted capitalization resulting from prudent underwriting, a tempered direct premiums written trend in recent years and a sound overall risk management focus. As a result, surplus growth has occurred in recent years, complemented by support from ACA’s parent company. The positive outlook contemplates that operating performance and risk-adjusted capitalization will continue to trend favorably in the near and long term.


American National Life Insurance Co. of New York

American National Insurance Co. (ANICO) announced the formation of a new operating company, American National Life Insurance Co. of New York  (ANICONY), which will focus on selling an array of insurance and annuity products in New York state.

S&P considers ANICONY to be a strategically important operation within the ANICO group, and is assigning an 'A+' counterparty credit and FSR on ANICONY. The outlook is negative, reflecting the group's weak operating performance through the first half of 2009, and the negative impact it had on capitalization.


Anthem Blue Cross Blue Shield Partnership Plan Inc.

A.M. Best Co. has withdrawn the FSR of A (excellent) and issuer credit rating (ICR) of “a+” of Anthem Blue Cross Blue Shield Partnership Plan Inc. and assigned an NR-5 (not formally followed) to the FSR and “nr” to the ICR.

The rating actions follow the announcement by Community Insurance Co., a wholly owned subsidiary of ultimate parent company WellPoint Inc., of the merger of Anthem Blue Cross Blue Shield Partnership Plan Inc. into Community Insurance Co.


Axis Capital Holdings Ltd.’s senior notes

A.M. Best Co. assigned a debt rating of “bbb+” to the recently issued $500 million 5.875% senior unsecured notes due 2020 of Axis Specialty Finance LLC. The senior notes are unconditionally and irrevocably guaranteed by Axis Capital Holdings Ltd. (Axis) (Bermuda).The assigned outlook is stable.

The proceeds from the debt offering will be used for general corporate purposes, which may include the repurchase of common shares. The debt-to-adjusted capital ratio and fixed charge coverage remain comfortably within the range that is commensurate with the assigned rating for Axis.


Endurance Specialty Holdings Ltd.’s senior notes

Moody's Investors Service assigned a Baa1 rating to $85 million of senior notes due on July 15, 2034 issued by Endurance Specialty Holdings Ltd. S&P assigned its 'BBB+' senior debt rating on the notes.

Endurance sold the notes as an add-on to its previously issued 7% senior notes due 2034, which are currently rated Baa1 by Moody's. The issuance will increase the aggregate principal amount outstanding on this series of notes from $250 million to $335 million. Proceeds from the offering will be used for general corporate purposes. The outlook for the ratings is stable.

Endurance's ratings assigned by Moody’s reflect the firm's established business platform, its good spread of risk in international insurance and reinsurance (primarily through subsidiaries based in Bermuda, the United States and the United Kingdom), its strong earnings performance and internal capital generation to date, as well as its moderate financial leverage. Other strengths include its efficient operations, integrated systems infrastructure and the company's high-quality investment portfolio.


Forethought Financial Group Inc.’s senior unsecured debt

S&P assigned its 'BBB-' senior debt rating on Forethought Financial Group Inc.'s (FFG) senior unsecured debt. At the same time, the rating agency affirmed the 'BBB-' counterparty credit rating on FFG and 'A-' counterparty credit and FSRs on its subsidiary, Forethought Life Insurance Co. (FLIC). The outlook on both companies remains stable.  

S&P expects FFG's financial leverage to remain relatively unchanged following the company's proposed issuance of up to $150 million in senior unsecured notes. FFG will use the proceeds from the new issuance to retire its $146 million paid-in-kind notes held by Hillenbrand Inc.


Fortegra Financial subsidiaries

A.M. Best Co. affirmed the FSR of B++ (good) and upgraded the ICR to “bbb+” from “bbb” of Fortegra Financial Corp.’s (Fortegra Financial) property/casualty subsidiaries, Lyndon Southern Insurance Co. (Lyndon Southern) and Insurance Company of the South (ICOTS). A.M. Best also affirmed the FSR of B++ (good) and the ICR of “bbb” of the group’s life/health subsidiaries, Life of the South Insurance Co. (Life of the South), Bankers Life of Louisiana (Bankers Life) and Southern Financial Life Insurance Co. (Southern Financial). The outlook for all ratings is stable.

Fortegra Financial has experienced good operating results in recent periods due to favorable earnings in its insurance subsidiaries and increasing fee income being generated by its non-insurance affiliates, according to the rating agency. However, the Fortegra Financial maintains relatively high ratios of debt and intangible assets to equity. This is primarily due to the recent acquisition of Bliss & Glennon Inc. (a P&C insurance agency), and the recapitalization that took place in 2007 when Summit Partners Inc., a private equity and venture capital firm, acquired the company.

The ratings for Fortegra Financial’s life/health subsidiaries consider the sufficient level of risk-adjusted capitalization that has been maintained recently through statutory earnings despite notable stockholder dividends. The ratings for Fortegra Financial’s property/casualty subsidiaries recognize the companies’ solid risk-adjusted capitalization, niche distribution and historical operating profitability of their core credit-related books of business, which have been managed by current management since the mid-1990s.


The Hartford Financial Services Group Inc.’s senior notes

Moody's Investors Service has assigned a Baa3 rating to the new senior notes issued by The Hartford Financial Services Group Inc. The notes are a drawdown from the company's existing shelf registration and are a component of the company's recently announced $3.05 billion capital raise, which, in addition to the senior notes, includes $1.45 billion in common stock and $500 million in mandatory convertible preferred stock, Moody’s says. The proceeds from the offering, along with cash on hand, are to be used to fund the company's repayment of $3.4 billion received from the U.S Treasury under the Capital Purchase Program created under the Troubled Asset Relief Program. Portions of the proceeds are also intended to fund $675 million in upcoming 2010 and 2011 debt maturities. The outlook for the rating is stable.

The company's debt ratings are currently primarily based on support from its property/ casualty operating subsidiaries (rated A2 for insurance financial strength). Moody's does not consider the organization's life insurance operating subsidiaries (rated A3 for insurance financial strength) to be a supporter of the parent over the medium term due to continued elevated risk at the life companies. The Hartford's life group has been under strain in recent quarters due to losses in its investment portfolio and losses relating to the guarantees embedded in the company's in-force variable annuity policies.


Harris Insurance Holdings Inc. subsidiaries

A.M. Best Co. revised the outlook to negative from stable, and affirmed the FSRs of B+ (good) and issuer credit ratings of “bbb-” of Central United Life Insurance Co. (Central United), The Manhattan Life Insurance Co. (Manhattan Life), Family Life Insurance Co. (Family Life) and Investors Consolidated Insurance Co. (Investors Consolidated). All companies are subsidiaries of Harris Insurance Holdings Inc.

The outlook change reflects the noticeable drop in lead company Central United’s 2009 risk-adjusted capital position. In the second half of 2009, Central United purchased the remaining outstanding shares of an affiliated holding company, Manhattan Insurance Group Inc. http://www.centralunited.com/ While the purchase simplified the organizational structure, it also caused its affiliated investments to be disproportionate to the company’s capital and surplus position, the rating agency says.


Kaiser Permanente

Fitch Ratings has affirmed the 'A+' insurer financial strength (IFS) ratings on Kaiser's rated insurance affiliates, including Kaiser Permanente Insurance Co. The Rating Outlook is Stable.

Kaiser Permanente's vertically integrated business model, whose insurance, hospital and physician components provide coordinated services to its membership—primarily in California—facilitates cost control and medical case management, the rating agency says. Kaiser's strong liquidity and light capital-related ratios relative to Fitch's health care metrics are tempered by the health plan's insurance and actuarial risks.


Northwestern Mutual Life Insurance Co.

Moody's assigned a Aa2 (stable outlook) debt rating to Northwestern Mutual Life Insurance Co.’s (Northwestern Mutual, IFS rating; stable outlook) proposed issuance of approximately $1 billion in fixed rate surplus notes due 2040. In addition, the Aaa IFS rating of Northwestern Mutual was affirmed with a stable outlook.

S&P assigned its 'AA' rating on the surplus notes. At the same time, the rating agency affirmed its 'AAA'  counterparty credit and FSRs on Northwestern Mutual Life Insurance Co. and Northwestern Long Term Care Insurance Co. (collectively referred to as Northwestern Mutual). The outlook on these companies remains stable.

Moody's said that the surplus notes are subordinate to all policy claims and indebtedness at Northwestern Mutual. Interest and principal repayment on these surplus notes are subject to prior approval from the Commissioner of Insurance of the state of Wisconsin. The Aa2 rating on the surplus notes reflects the normal two-notch difference Moody's maintains between an operating company's IFS rating and the rating of subordinated surplus notes. The rating agency noted that Northwestern Mutual's Aaa IFS rating is based upon the company's exceptional franchise in individual participating life insurance, which is demonstrated by its excellent persistency, mortality and expense management, as well as by its solid capitalization.

S&P’s insurer FSRs on Northwestern Mutual reflect the group's strong competitive position with an emphasis on participating whole life insurance, very strong fundamental operating performance, very strong capitalization after incorporating our incremental stress analysis, and strong enterprise risk management, the rating agency says. S&P believes that Northwestern Mutual's surplus notes will increase the insurer's “already very strong capital position and that the issuance is well within tolerances for leverage and coverage at the current rating."


Park Insurance Co.

A.M. Best Co. downgraded the FSR to B- (fair) from B+ (good) and ICR to “bb-” from “bbb-” of Park Insurance Co. The outlook for both ratings has been revised to negative from stable.

The ratings are based on Park’s rapid premium growth over the past year, the rating agency says. Park’s capitalization is modest, as net premiums have grown excessively compared to its surplus. Other negative factors are the limited geographic scope and operating volatility associated with the ramp-up of the company.


PMI Group Inc. subsidiaries

S&P affirmed its 'B+' counterparty credit and FSRs and negative outlook on PMI Mortgage Insurance Co. Ltd. (PMI Europe) and its 'B+' FSR and negative outlook on PMI Insurance Co. (PIC). The rating agency subsequently withdrew the ratings on PIC and PMI Europe at the company's request, and said that these actions have no impact on the ratings on PMI Group Inc. or PMI Mortgage Insurance Co. (PMI).    

The outlook on both companies, consistent with the outlook on PMI, was negative," said S&P’s credit analyst Ron Joas. "The negative outlook reflected the potential for ongoing and increased losses because of the macroeconomic environment." If the economy both here in the United States and overseas were to experience another setback, delaying the recovery from the recession, delinquencies and resulting losses could place ever increasing strain on PMI's capital. If this were to happen, PMI and its core entities could experience further downgrades as PMI's capital erodes more quickly, in an extreme case potentially threatening the viability of these companies as going concerns, S&P says. 


VICTORE Insurance Co.

A.M. Best Co. affirmed the FSR of B++ (good) and ICR of “bbb” of VICTORE Insurance Co. The outlook for both ratings is stable.

The ratings reflect VICTORE’s current modest underwriting leverage, sound balance sheet liquidity and strong capitalization, A.M. Best says. Additionally the company benefits from being purchased in 2009 by American Safety Insurance Holdings Ltd. (ASI). Plans are to merge VICTORE with American Safety Casualty Insurance Co. (ASIC) and have the business written through ASIC.

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