A.M. Best Co. affirmed the financial strength ratings (FSR) and issuer credit ratings (ICR) of the subsidiaries of The Co-operators Group Ltd. (The Co-operators). In addition, A.M. Best affirmed the ICR of “bbb-” and the senior debt rating of “bbb-” on CAD 150 million 5.07% senior unsecured debentures, due July 2012 of Co-operators Financial Services Ltd., an interim holding company.
Concurrently, A.M. Best affirmed the debt ratings of “bbb-” of the preferred shares issued by Co-operators General Insurance Co. (Co-operators General). The outlook for all ratings is stable.
The ratings of Co-operators General are reflective of its strong capitalization, generally historically profitable operating performance as well as its market leadership position driven by strong brand name recognition, product line and geographic diversification, and effective use of subsidiaries and multiple channels of distribution, the rating agency says.
The ratings of The Sovereign General Insurance Co., L’Union Canadienne Compagnie D’Assurances and COSECO Insurance Co. recognize their risk-adjusted capitalization relative to their ratings, good overall balance sheet liquidity and their strategic roles within the Co-operators group. The rating of Co-operators Life Insurance Co. acknowledges its strong risk-adjusted capital position, very good level of profitability and continued premium growth in its core business segments. The company offers a wide variety of products to individual, group and credit union markets throughout Canada.
Century Reinsurance Co. and Brandywine Group
A.M. Best Co. has withdrawn the FSR of B- (fair) and ICR of “bb-” of Century Reinsurance Co. and Brandywine Group and assigned an NR-5 (not formally followed) to the FSRs and an “nr” to the ICRs.
Effective Dec. 31, 2009, Century Reinsurance Co. was merged into its parent company, Century Indemnity Co., a wholly owned indirect subsidiary of ACE Ltd. (ACE), with Century Indemnity Co. being the surviving entity. Century Indemnity Co. and Century Reinsurance Co. were the sole members of the Brandywine Group.
The FSR of B- (Fair) and ICR of “bb-” of Century Indemnity Co. are unchanged at this time.
A.M. Best Co. affirmed the FSR of A (excellent) and ICR of “a” of Farmers Insurance Group (Farmers) and its members. Concurrently, A.M. Best has affirmed the debt ratings on the outstanding surplus notes of Farmers Insurance Exchange and Farmers Exchange Capital, and the ICR of “a” of Farmers’ management company and attorney-in-fact, Farmers Group Inc. (FGI). The outlook for all ratings is stable.
The ratings reflect Farmers’ market leadership position, prudent risk management efforts and strategic importance to Zurich Financial Services Ltd. Farmers is the third-largest personal lines insurer in the United States, with a particularly strong market position in the western and southwestern United States. Although, Zurich has no ownership interest in the Farmers Insurance Exchange, Farmers accounts for a significant portion of Zurich’s worldwide premiums, and has strong brand name recognition, the rating agency says.
In addition, the recent acquisition of 21st Century Insurance Company has allowed Farmers entry into the direct market through a well-established platform. The acquisition also broadened and improved Farmers’ product and geographic diversification.
Former OneBeacon subsidiaries
S&P corrected its ratings on United Security Insurance Co., Sparta Insurance Co., Pride National Insurance Co. and Drivers Ins. Co. by withdrawing them. “We erroneously listed these companies as part of OneBeacon Insurance Group Ltd. in an article published on Feb. 3, 2010. United Security, Sparta Insurance, Pride National and Drivers Ins. Co. are no longer affiliated with OneBeacon,” the rating agency says.
Pacific Union Assurance Co.
A.M. Best Co. has withdrawn the FSR of A- (excellent) and ICR of “a-” of Pacific Union Assurance Co. (San Francisco) and has assigned a category NR-5 (Not Formally Followed) to the FSR and an “nr” to the ICR.
Effective Dec. 31, 2009, Pacific Union Assurance Co. was merged into its parent company, American General Life Insurance Co., an indirect wholly owned subsidiary of American International Group Inc.
The FSR of A (excellent) and ICR of “a” of American General Life Insurance Co. are unchanged at this time.
A.M. Best Co. removed from under review with negative implications and affirmed the FSR of A+ (superior) and ICR of “aa-” of Primerica Life Insurance Co. and its subsidiaries: National Benefit Life Insurance Co. and Primerica Life Insurance Company of Canada (collectively known as Primerica Life). Concurrently, A.M. Best assigned an ICR of “a-” to Primerica Inc. (Primerica), which is the newly established holding company for Primerica Life. The outlook assigned to all ratings is negative.
The rating actions reflect A.M. Best’s expectations that Primerica’s business model and top-line growth will remain relatively unaffected by Citigroup Inc.’s planned initial public offering (IPO) of Primerica later this month. Based upon discussions with management representatives from both Citigroup and Primerica, A.M. Best anticipates that Primerica Life also will continue to be well capitalized on a risk-adjusted basis post IPO, despite the fact that more than 80% of its in-force life insurance business will be reinsured back to Citigroup.
S&P lowered its counterparty credit and FSRs on UNIFI Mutual Holding Co.'s insurance operating companies—Ameritas Life Insurance Corp., Acacia Life Insurance Co., First Ameritas Life Insurance Corp. of NY and Union Central Life Insurance Co.—to 'A+' from 'AA-'. The outlook on these companies (collectively referred to as UNIFI) is stable.
The rating actions reflect S&P’s expectation that UNIFI's earnings stream will be more concentrated. In addition, the rating agency believes the company's competitive position has modestly weakened.
