A.M. Best, Moody’s Investors Service and Standard & Poor's announced ratings updates. The following are some of the most recent:

 

Ansvar Insurance Co. Ltd.

A.M. Best placed under review with positive implications the financial strength rating (FSR) of A- (excellent) and issuer credit rating of “a-” of Ansvar Insurance Co.Ltd. Ansvar is a wholly owned subsidiary of Ecclesiastical Insurance Office plc (EIO), the intermediate operating holding company of the Ecclesiastical group of companies.

The rating actions follow EIO’s announcement of its intention to change Ansvar’s legal structure, subject to regulatory and court approval. From Jan. 1, 2011, Ansvar is expected to operate as a division of EIO under its existing brand rather than as a separate subsidiary. The purpose of the reorganization is to allow the group to manage its capital more efficiently to provide Ansvar with access to EIO’s main reinsurance program and to maximize operating efficiencies within the group, the rating agency says.

 

Fidelity National Financial Inc.

A.M. Best and S&P reacted to the announcement that Fidelity National Financial (FNF) merged Chicago Title Insurance Co. of Oregon into its parent, Security Union Title Insurance Co., on June 29. In addition, on June 30, Security Union and Ticor Title Insurance Co. were merged into Chicago Title Insurance Co., and FNF merged Lawyers Title Insurance Corp. into its parent, Fidelity National Title Insurance Co.   

A.M. Best withdrew the FSR of A- (excellent) and issuer credit ratings (ICR) of “a-” of several subsidiaries of FNF, and assigned an NR-5 (not formally followed) to the FSR and an “nr” to the ICRs. The ratings were withdrawn due to legal entity mergers.

S&P withdrew its 'A-' counterparty credit and FSRs on Chicago Title Insurance Co. of Oregon, Security Union Title Insurance Co., and Ticor Title Insurance Co. At the same time, the agency withdrew its 'BBB+' counterparty credit and FSRs on Lawyers Title Insurance Corp. These rating actions have no effect on the ratings on FNF (BBB-/Negative/--) or the ratings on FNF's remaining  underwriters—Alamo Title Insurance Co., Chicago Title Insurance Co., Fidelity National Title Insurance Co., and Commonwealth Land Title Insurance Co.      

 

First Mercury Financial Corp.

Moody's affirmed the Ba2 long-term issuer rating of First Mercury Financial Corp. and the Baa2 insurance financial strength (IFS) rating of First Mercury Insurance Co. following the group's announcement that it has entered into a definitive agreement to purchase Valiant Insurance Group Inc. for approximately $55 million from Ariel Holdings Ltd. The outlook for the ratings has been changed to negative from stable because of the increased underwriting leverage and execution risks resulting from the acquisition.

Moody's noted that the acquisition of Valiant is consistent with First Mercury's growth and diversification strategy by providing First Mercury with access to the admitted market.

 

Freedom Specialty Insurance Co.

A.M. Best assigned an FSR of A+ (superior) and ICR of “aa-” to Freedom Specialty Insurance Co. The outlook assigned to both ratings is negative.

Freedom Specialty is a wholly owned, fully reinsured subsidiary of Scottsdale Insurance Co. Both Freedom Specialty and Scottsdale are members of the Nationwide Group.

Freedom Specialty’s ratings reflect its projected levels of risk-adjusted capitalization in addition to its reinsured affiliation with Scottsdale, A.M. Best says. The outlook reflects the potential impact on Freedom Specialty’s ratings from the challenges faced by Nationwide’s management to rebuild surplus in the wake of historical storm losses and the decline in risk-adjusted capitalization associated with the early 2009 privatization of Nationwide Financial Services Inc.

 

Glacier Insurance AG

A.M. Best removed from under review with negative implications and affirmed the FSR of A- (excellent) and ICRs of “a-” of Glacier Insurance AG following the successful completion of its acquisition by Torus Insurance (Bermuda) Ltd. a subsidiary of Torus Insurance Holdings Limited (Torus). Subject to regulatory approval, Glacier Insurance will be renamed Torus Insurance (Europe) AG. All ratings have been assigned a stable outlook.

Glacier Insurance’s stand-alone risk-adjusted capitalization is expected to remain supportive of its rating level in 2010. Additionally, the company benefits from the explicit support of Torus Bermuda, through the provision of a 95% quota share reinsurance agreement.

 

New York Life Insurance Co. 

Moody affirmed the Aaa IFS ratings of New York Life Insurance Co. and its principal subsidiary, New York Life Insurance and Annuity Corp. (together, New York Life), and changed the outlook to stable from negative. The Aa2 rating of New York Life's surplus notes and the Aaa debt ratings of New York Life's funding agreement-backed medium-term note programs were also affirmed with the outlook changed to stable from negative.

Moody's said the affirmation of the ratings and the change of the outlook to stable are based upon New York Life's continued leading position in the U.S. life insurance market, as well as its significant financial flexibility and operational scale. The rating also reflects the group's earnings diversity, very strong liquidity and outstanding capitalization, the rating agency says.

 

Nippon Life Insurance Co.

S&P revised to negative from stable its outlook on the IFS and long-term counterparty credit ratings on Nippon Life Insurance Co. At the same time, the rating agency affirmed the 'AA-' IFS and long-term counterparty credit ratings on Nippon Life and the 'A' rating on Nippon Life's kikin debt (a form of subordinated debt unique to Japanese mutual life insurers).  

The outlook revision reflects the likelihood that Nippon Life's capitalization assessment may be revised downward in tandem with the introduction of S&P’s new risk-based insurance capital model for Asia-Pacific insurers. It also reflects the rating agency’s view that it may not be as easy as before for Nippon Life to strengthen its capitalization by building up retained earnings, given the company's declining profitability and sluggish investment conditions

 

TIAA-CREF Life Insurance Co.

Moody's affirmed the Aaa IFS ratings of Teachers Insurance and Annuity Association of America (TIAA) and its principal subsidiary, TIAA-CREF Life Insurance Co. Moody's also affirmed the Aa1 long-term issuer rating of TIAA and the Aa1 guaranteed debt of TIAA Global Markets Inc. (TGM). In the same rating action, the rating agency changed the rating outlook of TIAA and its affiliates to stable from negative.

Moody's said the affirmation of TIAA's ratings, and the change in outlook to stable, were driven primarily by the company's strengthened capital position and an expectation of improved earnings over the near-to-medium term.

 

Unity Mutual Life Insurance Co.

A.M. Best downgraded the FSR to C++ (marginal) from B- (fair) and ICR to “b+“ from “bb-” of Unity Mutual Life Insurance Co. The outlook for both ratings has been revised to negative from stable.

The rating actions reflect Unity Mutual’s weakened capital position on both an absolute and risk-adjusted basis, as measured by Best’s Capital Adequacy Ratio. This significant decline is due to operating results and investments in affiliates, as well as a required increase in the funding for Unity Mutual’s pension plan minimum liability in 2009. A.M. Best notes that a $3 million surplus note supports the capital structure of the company.

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