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:


Alterra Capital Holdings Ltd. and its subsidiaries

A.M. Best Co. upgraded the financial strength rating (FSR) to A (excellent) from A- (excellent) and issuer credit ratings (ICR) to “a” from “a-” of the operating subsidiaries of Alterra Capital Holdings Ltd. (Alterra) (formerly known as Max Capital Group Ltd.), following its recent merger with Harbor Point Ltd. These companies were former subsidiaries of Max Capital Group Ltd.

Additionally, A.M. Best upgraded the ICR to “bbb” from “bbb-” of Alterra as well as all of its debt ratings. All the above ratings have been removed from under review with positive implications and assigned a stable outlook.

A.M. Best also has affirmed the FSR of A (excellent) and ICRs of “a” of the subsidiaries of the former Harbor Point Ltd. The outlook for these ratings is stable.

The FSR has been upgraded to A (excellent) from A- (excellent) and the ICRs to “a” from “a-” for the following operating subsidiaries of Alterra Capital Holdings Ltd.:

• Alterra Insurance Ltd. (formerly Max Bermuda Ltd.)

• Alterra Reinsurance Europe Ltd. (formerly Max Re Europe Ltd.)

• Alterra Insurance Europe Ltd. (formerly Max Insurance Europe Ltd.)

• Alterra America Insurance Co. (formerly Max America Insurance Co.)

• Alterra Specialty Insurance Co. (formerly Max Specialty Insurance Co.)

Fitch Ratings affirmed Alterra Capital Holdings Ltd.’s ratings following the closing. Fitch believes this merger has favorably created a more diversified, multi-line reinsurance and insurance company, although the acquisition of Harbor Point creates some execution risk in integrating the two organizations. Harbor Point was a Bermuda-based global reinsurance company that wrote property, casualty and specialty reinsurance business. The stable outlook reflects Alterra's improvement in capitalization and earnings, reasonable financial leverage and lower investment risk.

Fitch affirms the following ratings with a stable outlook:

• Alterra Capital Holdings Ltd. (f/k/a Max Capital Group Ltd.)

    —Issuer Default Rating (IDR) at 'A-'

• Alterra USA Holdings Ltd. (f/k/a Max USA Holdings Ltd.)

    —IDR at 'A-'
    —$90.6 million 7.2% notes due April 14, 2017 at 'BBB+'

• Alterra Insurance Ltd., Alterra Reinsurance Europe Ltd., Alterra Insurance Europe Ltd., Alterra Specialty Insurance Co. and Alterra America Insurance Co.

    —Insurer Financial Strength (IFS) at 'A'

S&P also affirmed its 'BBB' counterparty credit rating on Alterra Capital Holdings Ltd. The rating agency affirmed its 'BBB' counterparty credit ratings on Alterra Capital's intermediary holding-company subsidiaries: Alterra USA Holdings Ltd., Max Europe Holdings Ltd. and Max UK Holdings Ltd. In addition, S&P affirmed its 'A-' counterparty credit and FSRs on Alterra Capital's operating subsidiaries: Alterra Insurance Ltd., Max America Insurance Co., Max Specialty Insurance Co., Max Re Europe Ltd., Max Insurance Europe Ltd., Harbor Point Re Ltd., and Harbor Point Reinsurance US Inc. The outlook on all of these companies remains stable.



Moody's assigned a Baa2 senior unsecured debt rating to CIGNA Corp.'s issuance of $300 million of new ten-year maturity debt. The outlook on the rating is stable.

The debt issuance is a draw on the company's shelf registration, which it filed in August 2009, Moody’s says. CIGNA expects to use the net proceeds for general corporate purposes. Moody's said that with the additional debt, CIGNA's financial leverage (debt to capital, where debt includes pension obligations and operating leases) is not expected to change appreciably from its current level of approximately 45.6% as of March 31, 2010. Moody's also noted that CIGNA has approximately $200 million of debt maturing in early 2011, which it anticipates will offset a portion of this increase in debt.

S&P assigned its 'BBB' senior unsecured debt rating to CIGNA Corp.'s senior notes issue. S&P says the ratings on CIGNA (BBB/negative/A-2) are based on the company's strong consolidated competitive position and operating performance, good financial flexibility and limited exposure to the provisions of the recently enacted health care reform legislation.


The Farm Credit System Association Captive Insurance Co.

A.M. Best Co. affirmed the FSR of A (excellent) and ICR of “a+” of The Farm Credit System Association Captive Insurance Co. (FCSAC). The outlook for both ratings is stable.

The ratings reflect FCSAC’s excellent capitalization, profitable operating results, strong liquidity measures and conservative operating strategy, A.M. Best says. The FCSAC is an association captive dedicated to serving the Farm Credit System community. The company’s strong return measures are due to profitable underwriting results and generally consistent levels of investment income.


Farmers Union Mutual Insurance Co.

A.M. Best Co. downgraded the FSR to B (fair) from B+ (good) and ICR to “bb” from “bbb-” for Farmers Union Mutual Insurance Company. The outlook for both ratings is negative. Concurrently, A.M. Best withdrew the ratings and assigned an NR-4 to the FSR and an “nr” to the ICR. These withdrawals are in response to management’s request to be removed from A.M. Best’s interactive rating process.

Farmers Union’s rating downgrades are due in part to its persistent underwriting losses over the last four years, which totaled $6.7 million. In 2008 and 2009, Farmers Union experienced frequent and severe storm losses from wind, hail and tornadoes, along with a surplus loss of 35.5% and 31.6%, respectively. Although Farmers Union has implemented corrective actions and entered into a 25% quota share reinsurance agreement to improve net premium leverage, A.M. Best remains concerned with Farmers Union’s poor operating performance and ability to generate surplus growth.


First American Title Insurance Co.

S&P affirmed its 'BBB+' counterparty credit and FSRs on First American Title Insurance Co. (FATICO). The outlook on FATICO remains negative. S&P affirmed the ratings following the announcement that First American Corp. will spin off its title insurance operations, including FATICO and other financial services businesses of First American Financial Corp. (FAFC), which will become FATICO's publicly traded holding company. The rating agency expects that the spin-off will be completed as planned on June 1, 2010, pending regulatory approvals, as described in the SEC Form 10 and other related disclosures.


First Chicago Insurance Co.

A.M. Best Co. downgraded the FSR to C+ (marginal) from B- (fair) and ICR to “b-” from “bb-” of First Chicago Insurance Co. The outlook for both ratings is negative.

The rating downgrades reflect First Chicago’s elevated leverage as a result of its premium growth, which has far outpaced surplus growth, the rating agency says. In addition, underwriting losses have virtually negated almost $6.5 million in capital contributions from its parent, J and P Holdings Inc.

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