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


Alliance Insurance

A.M. Best Co. affirmed the financial strength rating (FSR) of A- (excellent) and issuer credit rating of “a-” of Alliance Insurance.

The ratings reflect the company’s strengthened liquidity, resilient underwriting performance and strong risk-adjusted capitalization. This is partially offset by high reinsurance dependence on the non-life segment, as is typical with other regional insurers.


American Investors Life Insurance Co. Inc.

A.M. Best Co. has withdrawn the FSR of A (excellent) and ICR of “a+” of American Investors Life Insurance Co. Inc. due to a legal entity merger. American Investors Life was a life/health subsidiary of Aviva USA Corp., which represents the U.S. operations of Aviva plc.

Effective Sept. 30, 2009, American Investors Life merged with Aviva Life and Annuity Co. The FSRs and ICRs of the remaining life/health members of Aviva USA are unchanged.


American Physicians Insurance Co. and American Physicians Service Group Inc.

A.M. Best Co. affirmed the FSR of A- (excellent) and ICR of “a-” of American Physicians Insurance Co. A.M. Best also affirmed the ICR of bbb- of API’s parent holding company, American Physicians Service Group Inc. The outlook for all ratings is stable.

API’s ratings reflect its excellent risk-adjusted capital position, solid history of operating profitability and strong policyholder retention levels. Furthermore, the rating agency contends that API is directed by an experienced management team that has skillfully utilized the local market knowledge obtained from API’s longstanding commitment to the Texas health care community to its competitive advantage. The company’s profitability also has been enhanced by the passage of tort reform in 2003, which has contributed to an influx of physicians into Texas and a significant reduction in claim frequency. The stable outlook reflects A.M. Best’s expectations that a solid level of profitability will be maintained over the near term, further supporting API’s risk-adjusted capitalization.


HUB International

Standard & Poor's Ratings Services revised its outlook on HUB International Ltd. to negative from stable. At the same time, it affirmed its B counterparty credit and CCC+ senior unsecured debt ratings on HUB. S&P also assigned its B (the same as the B counterparty credit rating) rating on HUB's planned $200 million incremental senior secured-term loan due in June 2014.

The recovery rating is “3,” indicating S&P’s expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. In addition, the rating agency revised its recovery rating on HUB's existing senior secured credit facilities, which consist of a $625 million senior secured-term loan B, a $140 million delayed draw term loan, and a $100 million revolving credit facility, to “3” from ‘2.” As a result, ratings on these loans were lowered to B from B+, in accordance with our notching criteria for a recovery rating of “3.”

The outlook revision to negative primarily reflects HUB's increased debt burden following the planned $200 million incremental term loan, as well as the recent $30 million Canadian revolving credit facility that the company entered into in July 2009, according to S&P. The revised senior secured recovery rating to “3” from ‘2” reflects the larger amount of first-lien debt outstanding in our simulated default scenario than that used in our previous analysis because of the new incremental senior secured-term loan.


Kenya Reinsurance Corp. Ltd.

A.M. Best Co. affirmed the FSR of B+ (good) and the ICR of bbb- of Kenya Reinsurance Corp. Ltd. The outlook for both ratings remains stable.

The ratings reflect the company’s strong prospective risk-adjusted capitalization and good market position. Offsetting factors include a weak level of enterprise risk management, declining underwriting profitability and a high concentration of real estate investment, the rating agency says.


Misr Insurance Co.

A.M. Best Co. downgraded the FSR to B++ (good) from A- (excellent) and the ICR to bbb+ from a- of Misr Insurance Co. The outlook for both ratings has been revised to stable from negative.

The downgrade reflects a decline in risk-adjusted capitalization impacted by a reduction in revaluation reserves due to unfavorable equity markets. Additionally, while technical performance has improved during financial year 2009, Misr remains under pressure to maintain its combined ratio below 100%. Offsetting these factors is Misr’s excellent profile and leading position in the Egyptian insurance market, according to A.M. Best.


Noridian Mutual Insurance Co. (d/b/a Blue Cross Blue Shield of North Dakota)

S&P affirmed its A- counterparty credit and FSR on Noridian Mutual Insurance Co., which does business as Blue Cross Blue Shield of North Dakota, and revised the outlook to stable from negative. The stable outlook reflects S&P’s expectation that the company’s operating performance will not decline meaningfully from 1% ROR for 2009 and 2% to 3% for 2010, given the rate approval for mid-year 2009-2010 renewals.

The rating continues to reflect Noridian's dominant market position in North Dakota (more than 85% of the insured market), and strong liquidity profile offset by a challenging regulatory environment—specifically, rate regulation as well as geographic and product concentration.


Prism Assurance Ltd.

A.M. Best Co. affirmed the FSR of A- (excellent) and ICR of “a-” of Prism Assurance Ltd. The outlook for both ratings is stable.

The ratings reflect Prism’s strong capitalization and improved operating performance in recent years. The ratings also consider Prism’s strategic role as the captive insurance company of Apogee Enterprises Inc., and the substantial financial flexibility available to Prism as part of Apogee, A.M. Best says.


Western Isles Insurance Co. Ltd.

A.M. Best Co. downgraded the FSR to C++ (marginal) from B+ (good) and the ICR to “b” from bbb- of Western Isles Insurance Co. Ltd. (WIICL). The outlook for all ratings remains negative. Concurrently, A.M. Best has withdrawn the ratings at the company’s request and assigned a category NR-4 to the FSR and “nr” to the ICR.

The rating downgrade reflects a significant change in business profile and a considerable increase in risk-adjusted capital requirements.

WIICL originally operated as a single-parent, captive reinsurer, providing its parent with access to the London reinsurance market. WIICL now writes business, which generally originates from Russia and cedes it back to either its parent or other unrated reinsurance carriers. As a result of this, A.M. Best’s considers that WIICL has significantly increased its credit exposure.

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