A.M. Best Co. assigned a debt rating of “bbb” to the recently issued $350 million 6.25% senior unsecured notes due 2020 of Alterra Finance LLC. The senior notes are fully and unconditionally guaranteed by Alterra Capital Holdings Ltd. (Alterra). The assigned outlook is stable.
The proceeds from the debt offering will be used for the repayment of existing debt and general corporate purposes. The debt-to-adjusted capital ratio and fixed charge coverage remain comfortably within the range that is commensurate with the assigned rating, A.M. Best says.
S&P revised its outlook on American Equity Investment Life Holding Co. (AEIL) and American Equity Investment Life Insurance Co. (AEL) to positive from stable. At the same time, S&P affirmed its 'BB+' counterparty credit rating on AEIL and its 'BBB+' counterparty credit and financial strength ratings on AEL. Collectively, these companies are referred to as American Equity.
The rating agency believes American Equity's financial profile could improve sufficiently during the next two years to support higher ratings. If this occurs, S&P could raise ratings on American Equity by one notch. Alternatively, the ratings could be affirmed and the outlook revised to stable if capitalization does not become redundant at the 'A' confidence level, the investment risk profile has material risk concentrations, financial leverage remains high with commensurate excess double leverage charges that reduce capitalization, or operating performance deteriorates. The ratings reflect American Equity's strong competitive position and business profile, which are the strength of the ratings. The company is consistently a top-ranked issuer of indexed annuities that maintains strong and diverse distribution relationships.
A.M. Best Co. affirmed the financial strength rating (FSR) of A- (excellent) and the issuer credit rating (ICR) of “a-” of Americo Financial Life and Annuity Insurance Co. (AFL). Concurrently, A.M. Best affirmed the FSRs of B+ (good) and the ICRs of “bbb-” of AFL’s key life/health affiliates. Additionally, A.M. Best affirmed the ICR of “bbb-” and the debt rating of “bbb-” on $125 million 7.875% senior unsecured notes due 2013 of Americo Life Inc. (Americo). The outlook for all ratings is stable.
The ratings primarily reflect the strong level of risk-adjusted capital, favorable operating results and solid liquidity of the statutory operating companies, as well as the financial leverage ratios at Americo, which are commensurate with its current ratings, A.M. Best says. AFL’s consolidated statutory capital position has improved noticeably in recent periods due to increased earnings, unrealized capital gains, a $25 million capital contribution from Americo and the conversion of $60 million of surplus notes into permanent paid-in capital. In addition, the group maintains a relatively conservative investment portfolio, concentrated primarily in publicly traded investment grade bonds and mortgage loans, with minimal exposure to sub-prime and Alt-A residential mortgage-backed securities.
However, A.M. Best believes there is the potential for some additional asset impairments within the company’s structured securities and direct commercial loan portfolios, in the current economic environment.
S&P removed its long-term counterparty credit and insurer financial strength ratings on U.K.-based non-life insurer AXA Insurance U.K. PLC (AXAI) from CreditWatch with negative implications and affirmed them at 'AA-'. The ratings had been placed on CreditWatch on June 16, 2010, following the announcement of the sale of some of AXA's U.K. life insurance business. The outlook is stable.
To resolve AXAI's CreditWatch negative placement, S&P reviewed AXAI’s stand-alone credit profile and its status within the AXA group. The rating benefits from three notches of support under S&P’s criteria for groups, but the fact that it views AXAI's stand-alone credit profile as strong was an important factor in the rating agency’s decision to affirm AXAI's core status.
A.M. Best affirmed the FSR of A (excellent) and ICR of “a” of Centurion Life Insurance Co. (CLIC). Concurrently, A.M. Best has affirmed the FSR of A- (excellent) and ICR of “a-” of Centurion Casualty Co. (CCC). CLIC and CCC are subsidiaries of Wells Fargo Financial Inc. (WFFI), whose ultimate parent is Wells Fargo & Co. The outlook for all ratings is stable.
The ratings for CLIC reflect its excellent risk-adjusted capital position, consistently profitable operating results, which provide CLIC with superior liquidity, the rating agency says. Risk-adjusted capitalization is very strong, enhanced by the continued profitability of its creditor operations, investment income on excess surplus and generally favorable investment performance. CLIC has minimal exposure to real estate linked assets through mortgage-backed securities. CLIC discontinued writing new annuity business in June 2010, but will continue to support existing annuity business.
A.M. Best assigned a FSR of A- (excellent) and ICR of “a-” to CMIC RRG. The outlook assigned to both ratings is stable.
The ratings reflect CMIC RRG’s solid risk-adjusted capitalization, A.M. Best’s expectation of a modest operating performance as the company is a start-up and its strong reinsurance protection. Partially offsetting these positive factors is the risk of adverse losses from being a start-up company and expanding into new states, in addition to the concentration risk of writing in one line of business in a limited geographic area, the rating agency says.
Fitch Ratings affirmed Liberty Mutual Group Inc.'s (LMG) issuer default rating (IDR) at 'BBB' and LMG's operating subsidiaries' (collectively referred to as Liberty Mutual) IFS ratings at 'A-'. The rating outlook has been revised to stable from negative.
The affirmations are based on LMG's established and sustainable positions in its chosen markets, benefits derived from the company's multiple distribution channels, adequate core underwriting earnings, and good liquidity profile, Fitch says. The rating agency also recognizes LMG's improvement in statutory surplus levels and notes that recent accident year reserve estimates continue to develop favorably.
LMG's tangible financial leverage, which was a driver for the negative outlook during Fitch's last review, has favorably improved to 24.6% as of June 30, 2010. As of year-end 2008 LMG's tangible financial leverage was as high as 37.2%. The improvement in financial leverage is due primarily to positive changes in unrealized losses and net income.
Fitch has affirmed the following ratings and revised the outlook to stable from negative:
• Liberty Mutual Group Inc. IDR at 'BBB'
• Liberty Mutual Insurance Co. IDR at 'BBB+'
• Ohio Casualty Corp. IDR at 'BBB'\
• Safeco Corp. IDR at 'BBB'
Fitch has affirmed the IFS ratings of the following members of Liberty Mutual Inter-company Insurance Pool (LMIC Pool) at 'A-' and revised the outlook to stable from negative:
• Liberty Mutual Insurance Co.
• Employers Insurance Company of Wausau
• Liberty Mutual Fire Insurance Co.
• Liberty Insurance Corp.
• Wausau Business Insurance Co.
• Wausau Underwriters Insurance Co.
• LM Insurance Corp.
• The First Liberty Insurance Corp.
• Liberty Personal Insurance Co.
• Liberty Surplus Insurance Corp.
• Wausau General Insurance Co.
• Liberty Mutual Mid-Atlantic Insurance Co.
Fitch has affirmed the IFS ratings of the following companies that participate in a 100% quota share with the LMIC Pool at 'A-' and revised the outlook to stable from negative:
• Liberty Lloyds of Texas Insurance Co.
• Liberty County Mutual Insurance Co.
• Liberty Insurance Underwriters Inc.
• LM Property and Casualty Insurance Co.
• LM General Insurance Co.
• LM Personal Insurance Co.
• Liberty Mutual Personal Insurance Co.
Fitch has affirmed the IFS ratings of the following members of Peerless Insurance Inter-company Insurance Pool (Peerless Pool) at 'A-' and revised the outlook to stable from negative:
• Peerless Insurance Co.
• Peerless Indemnity Ins Co.
• America First Insurance Co.
• America First Lloyd's Ins Co.
• Colorado Casualty Ins Co.
• Consolidated Ins Co.
• Excelsior Insurance Co.
• Golden Eagle Ins Corp.
• Hawkeye-Security Ins Co.
• Indiana Insurance Co.
• Liberty Mutual Mid-Atlantic Ins Co.
• Mid-America Fire & Cas.
• The Midwestern Indemnity Co.
• Montgomery Mutual Ins Co.
• The Netherlands Ins Co.
• National Ins Assoc.
• The Ohio Casualty Insurance Co.
• Avomark Insurance Co.
• West American Insurance Co.
• American Fire and Casualty Co.
• Ohio Security Insurance Co.
• Insurance Company of Illinois
• Safeco Insurance Company of Illinois
• American Economy Insurance Co.
• American States Insurance Co.
• American States Preferred Insurance Co.
• Safeco Insurance Company of Indiana
• Safeco National Insurance Co.
• Safeco Insurance Company of Oregon
• American States Lloyds Insurance Co.
• Safeco Lloyds Insurance Co.
• First National Insurance Company of America
• General Insurance Company of America
• Safeco Insurance Company of America
• Safeco Surplus Lines Insurance Co.
• American States Insurance Company of Texas
Fitch has withdrawn the following ratings due to a legal entity merge:
• Ohio Casualty of New Jersey Inc.
• Liberty Insurance Company of America
A.M. Best assigned debt ratings of “a” to the recently issued USD 600 million, 3.40% senior notes due Sept. 17, 2015 and $500 million, 4.90% senior notes due Sept. 17, 2020 of Manulife Financial Corp. (MFC).
The ratings have been placed under review with negative implications, which is consistent with the under review status of all other existing ratings of MFC and its core operating insurance subsidiaries.
The proceeds from the debt offerings will be utilized for general corporate purposes by MFC, including investments in its subsidiaries. With the new debt, A.M. Best notes that MFC’s existing financial leverage has elevated and is within the range that supports its current ratings. Additionally, the interest coverage ratio has declined modestly but remains in the range expected by A.M. Best.
A.M. Best affirmed the FSR of A- (excellent) and ICR of “a-” of United Insurance Co. (United) and its subsidiary, United Re (Europe) S.A. The outlook for all ratings is stable.
The ratings reflect United’s adequate capitalization, strong strategic relationship with its sponsoring shareholders and its market presence as an alternative risk capacity vehicle, A.M. Best says. United and all its captive clients are managed by Aon Global Insurance Managers or are self managed captives and/or are shareholders of United. A.M. Best will continue to monitor United’s ability to manage its large ceded balances, over 80% of which are secured by letters of credit or other forms of collateral posting.
