Moody's Investors Service cut the financial strength rating (FSR) on Assured Guaranty Ltd.'s bond insurance unit to Aa3 from Aa2, according to The Wall Street Journal. Moody’s said another downgrade is possible, and the bond insurer responded by pledging to keep its ratings from dropping more.
Moody's affirmed the rating on Assured Guaranty’s municipal finance insurer Assured Guaranty Municipal Corp., but maintains a negative outlook, WSJ reports. Moody's downgraded Assured Guaranty Corp. to Aa3 from Aa2, and downgraded the reinsurance unit, Assured Guaranty Re, to A1 from Aa3 on the lack of business opportunities to reinsure other insurers. Both remain on review for an additional downgrade.
AVIVA plc and its subsidiaries
A.M. Best Co. affirmed the FSR of A (excellent) and issuer credit ratings (ICR) of “a+” for the subsidiaries of the non-operating holding company, AVIVA plc (AVIVA). A.M. Best also affirmed the ICR of “a-” and the ratings on the debt securities issued by AVIVA. Additionally, A.M. Best has withdrawn the FSR of A (excellent) and ICR of “a+” for AVIVA Courtage after its business was merged into AVIVA Vie in 2008. The outlook for all ratings is stable.
The ratings reflect AVIVA’s improving risk-adjusted capitalization and financial performance, resulting from improving market conditions, management initiatives and its diversified business model. Offsetting factors are the increase in financial leverage, as well as operational risks associated with AVIVA’s ongoing restructuring of its European operations.
A.M. Best affirmed the FSR of B++ (good) and ICR of bbb+ of China Taiping Insurance (Singapore) Pte. Ltd. (formerly China Insurance Co. [Singapore] Pte. Ltd.) The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the ratings and assigned a NR-4 to the FSR and “nr” to the ICR. This action reflects China Taiping Insurance (Singapore) Pte. Ltd. management’s decision to withdraw from A.M. Best’s interactive rating process.
The ratings reflect China Taiping Insurance (Singapore) Pte. Ltd.’s consistent improvement in its overall underwriting performance and adequate risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio, the rating agency says. Partially offsetting rating factors include the company’s continued unprofitable underwriting results from its motor line of business.
A.M. Best and Fitch announced their latest rating actions on CNA Financial Corp.’s $350 million issue of senior unsecured notes, due 2019. A.M. Best assigned a debt rating of “bbb.” The assigned outlook is negative.
Fitch Ratings has assigned a 'BBB-' rating. The rating outlook remains negative. The ratings of CNA and its insurance company subsidiaries are not affected by this action, however, the ratings are subject to an ongoing review by Fitch, which could result in near-term rating actions.
CNA intends to use the net proceeds of the senior unsecured notes issuance to redeem $250 million of the $1.25 billion of cumulative senior perpetual preferred stock it issued to its parent, Loews Corp., in November 2008. CNA plans to use the remaining proceeds for general corporate purposes.
A.M. Best affirmed the FSA of A (excellent) and ICR of “a” of Dongbu Insurance Co. Ltd. The outlook for both ratings is stable.
The ratings reflect Dongbu’s solid market profile, sound underwriting performance and adequate capitalization level. According to the rating agency, Dongbu has maintained a market share of 15% in terms of direct premiums written, remaining the third-largest non-life insurer in South Korea for three consecutive years. Its five-year average operating ratio stood at 92% and compared favorably to its peers.
Germania Mutual Group and its members
A.M. Best revised the outlook to negative from stable, and affirmed the FSR of A (excellent) and ICR of “a” of Germania Mutual Group and its property/casualty members.
Concurrently, A.M. Best affirmed the FSR of B++ (good) and ICR of bbb of Texas Heritage Insurance Co., an affiliate of Germania. The outlook for these ratings is stable.
The affirmation of the ratings reflects Germania’s adequate risk-adjusted capitalization, its longtime experience and expertise in the Texas marketplace and its conservative investment portfolio with consistent investment income, A.M. Best says.
A.M. Best has upgraded the ICR to “a+” from “a” and affirmed the FSR of A (excellent) of Hannover Re (Bermuda) Ltd. The outlook for both ratings is stable.
The ICR of Hannover Re Bermuda has been upgraded to reflect the strategic importance of the company to its parent, Hannover Rueckversicherung AG (Hannover Re), as the main property catastrophe excess of loss carrier and as the centre of excellence for catastrophe business within Hannover Re, the rating agency says. Hannover Re Bermuda’s ratings also reflect its excellent stand-alone risk-adjusted capitalization as well as the benefit of comprehensive reinsurance protection provided by its parent.
A.M. Best and Fitch Ratings announced rating actions on the new issuance of $300 million 6.3% 10-year senior unsecured notes of HCC Insurance Holdings Inc. (HCC). A.M. Best assigned a debt rating of “a-” and assigned a positive outlook.
Fitch Ratings assigned an A rating. The rating is equivalent to the rating on HCC's existing senior debt. The rating outlook is stable.
HCC intends to use the net proceeds of the issuance to repay outstanding indebtedness under its revolving loan facility. The facility expires on Dec. 19, 2011, and the outstanding balance was $320 million as of Sept. 30, 2009.
A.M. Best downgraded the FSR to A- (excellent) from A (excellent) and ICR to “a-” from “a” of Lawyers Mutual Liability Insurance Co. of North Carolina (LML). The outlook for both ratings has been revised to stable from negative.
These rating actions were taken due to the deterioration in LML’s operating performance during its most recent five-year period. The company was negatively impacted by a significant increase in claims frequency from late 2007 into 2009, driven by losses within several areas of legal practice, particularly real estate, A.M. Best says.
A.M. Best affirmed the FSR of A- (excellent) and ICR of “a-” of Malaysian Reinsurance Berhad. The outlook for both ratings is stable.
The ratings reflect Malaysian Re’s consistently profitable operating performance, prudent investment portfolio and improved presence in overseas markets. The company is a key subsidiary of MNRB Holdings Berhad, and the ratings acknowledge this group synergy and administrative support.
A.M. Best upgraded the FSR to A (excellent) from B+ (good) and ICR to “a” from bbb- of Phenix Mutual Fire Insurance Co., Concord, N.H. The ratings have been removed from under review with positive implications and assigned a stable outlook.
The ratings were placed under review with positive implications on April 29, 2009, following the announcement of the affiliation between Phenix Mutual and Motorists Mutual Insurance Co., lead member of The Motorists Insurance Pool.
Fitch Ratings assigned a BBB+ rating to the Reinsurance Group of America Inc.'s (RGA Inc.) issuance of $400 million in senior notes due in 2019. RGA's other ratings are not affected by this rating action. The outlook remains negative.
Fitch anticipates that RGA's pro forma Sept. 30, 2009, equity-adjusted leverage will increase to 20.3% from actual of 13.4% but remain within expectations for the rating.
A.M. Best affirmed the FSR of A- (excellent) and ICR of “a-” of Sunderland Marine Mutual Insurance Co. Ltd. (SMMI) (United Kingdom). The outlook for both ratings remains stable.
A.M. Best expects SMMI’s risk-adjusted capitalization to strengthen during 2009, supported by an increase in retained earnings and a material reduction in investment risk. In 2008, SMMI’s risk-adjusted capitalization was adversely impacted by significant realized and unrealized losses on equities. The company has, subsequently, substantially de-risked its investment portfolio through the sale of its equity holdings.
Transatlantic Holdings Inc. and its subsidiaries
A.M. Best revised the outlook to stable from negative for Transatlantic Holdings Inc., New York, N.Y. and its subsidiaries. A.M. Best also affirmed the FSR of A (excellent) and ICR of “a” of Transatlantic Holdings Inc. Group and its members, Transatlantic Reinsurance Co. and Trans Re Zurich, along with Transatlantic Holdings Inc. Group’s separately rated member, Putnam Reinsurance Co.
Concurrently, A.M. Best affirmed the ICR of bbb, debt rating of bbb on $750 million 5.75% senior unsecured notes, due 2015, as well as the indicative debt ratings of bbb on senior unsecured securities and bbb- on the subordinated securities under the shelf registration of Transatlantic Holdings Inc.
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