A.M. Best affirmed the financial strength rating (FSR) of A (excellent) and issuer credit ratings (ICR) of “a+” of AXIS Specialty Limited (AXIS) and its operating affiliates. Concurrently, A.M. Best affirmed the ICR of “bbb+” and all existing debt ratings of AXIS Capital Holdings Limited (ACHL). The outlook for all ratings is stable.
The ratings reflect AXIS’ consistently strong operating performance, excellent risk-based capitalization, robust enterprise risk management controls and a highly experienced management team, A.M. Best says. AXIS’ operating strategy has historically emphasized underwriting profitability with a balanced risk profile. The company maintains a well-diversified book of business, both geographically and by line of business, with an emphasis on short to medium-tail lines, principally specialty insurance lines including property, marine and political risk, along with property catastrophe and other specialty reinsurance coverages, the rating agengy says.
S&P revised its outlook on CIGNA Corp. and its wholly owned subsidiary, Connecticut General Life Insurance Co., to stable from negative. At the same time the rating agency affirmed the 'BBB' counterparty credit rating on CIGNA and 'A' counterparty credit and financial strength ratings on Connecticut General.
The outlook revision to stable from negative reflects S&P’s belief that CIGNA maintained strong earnings in 2009 and through the first three quarters of 2010 despite losses in its run-off reinsurance lines of business in 2010 that resulted from low interest rates. CIGNA's pretax operating return on revenue (ROR) of 8.1% in the first nine months of 2010 and its full-year 2009 ROR of 8.8% demonstrate its earnings strength, the rating agency says.
Moody's affirmed the Baa2 senior unsecured debt and A2 insurance financial strength ratings of Liberty Mutual Group Inc. (LMGI) and its subsidiaries, respectively. The outlook on all long-term ratings has been revised to stable, from negative.
According to Moody's, the rating affirmation for Liberty Mutual is based on its leadership position in both commercial and personal lines insurance throughout the United States and its significant international presence, on the breadth of its product and distribution platform, and on the group's overall strong asset quality and good profitability in recent years. These strengths are tempered by the insurance group's elevated operational and financial leverage, by its below-average underwriting margins relative to peers, and by exposures to losses from natural and man-made catastrophes and the potential for adverse reserve development in long-tail casualty lines, the rating agency says.
Moody’s added that the shift to a stable outlook, from negative, is based on the following considerations: 1) the group's steadily reduced, though still elevated, financial and operational leverage profile on both a nominal and tangible basis in 2009 and year-to-date 2010; 2) the fact that, notwithstanding the recent postponement of the Agency Markets IPO, Liberty Mutual now has the ability, if it chooses, to access equity capital markets, subject to market conditions; 3) the overall successful integration of acquisitions made in recent years, particularly Safeco and Ohio Casualty; and 4) the group's strengthened leadership position in the U.S. property/casualty insurance sector, across both commercial and personal lines.
A.M. Best Co. has affirmed the FSR of A+ (superior) and ICR of “aa-” of the key life/health subsidiaries of Lincoln National Corp. (Lincoln). Concurrently, A.M. Best affirmed the ICR of “a-” as well as the existing debt ratings of Lincoln. The outlook for all ratings is stable.
The ratings reflect Lincoln’s strong risk-based capital position, solid holding company liquidity, well-established brand and leading market position in most of its core businesses, A.M. Best says. The ratings also recognize the progress Lincoln has made in terming out its funding needs related to Regulation AXXX reserves, and the completion of sizeable debt and equity raises over the last year, which were used in part to repay all of the preferred shares issued to the U.S. Treasury under its Capital Purchase Program (CPP). Lincoln’s leverage and coverage ratios remain within A.M. Best’s expectations for its current rating level. A.M. Best notes the overall positive trend in net flows, which has contributed to strong top-line growth, within the individual variable annuity business. In addition, the rise in the equity markets, coupled with narrowing credit spreads, has had a positive impact on Lincoln’s fee income and has helped bolster its balance sheet.
Mariah Re Ltd.
S&P assigned its 'B(sf)' rating to the notes issued by Mariah Re Ltd.
The notes cover losses in the covered area resulting from severe thunderstorms. Losses will be calculated on an annual aggregate basis. Mariah Re is a special-purpose Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands. Wilmington Trust (Cayman) Ltd., as share trustee, holds all of Mariah Re's issued and outstanding shares in trust for charitable or similar purposes.
The cedent is American Family Mutual Insurance Co. (AmFam) on behalf of itself and its affiliates. S&P does not maintain an interactive rating on AmFam. However, because covered losses are linked to industry losses as calculated by the Property Claim Services, there is no reliance on AmFam's underwriting and claims-processing capabilities. In addition, AmFam will prepay the reinsurance premium quarterly for the upcoming accrual period for the tenor of the transaction, which mitigates any credit exposure noteholders would have to it.
A.M. Best assigned a FSR of B (fair) and ICR of “bb” to Maya Assurance Company (Maya). The outlook for both ratings is stable.
The ratings reflect Maya’s fair risk-adjusted capitalization and the operational and financial risks of a relatively new company growing in highly competitive markets, A.M. Best says. Offsetting these factors are the company’s generally favorable operating performance since commencing operations in March 2006 and its expertise within the for-hire-livery market in the Greater New York City metropolitan area. Maya’s rating outlook is reflective of A.M. Best’s expectation that the company will maintain risk-adjusted capital that supports the current ratings.
A.M. Best placed under review with positive implications the FSR) of A- (excellent) and ICR of “a-” of Rockhill Insurance Group (Rockhill) and its property/casualty members.
The rating action follows the announcement that the Boards of Directors of
State Auto Financial Corp.and State Automobile Mutual Insurance Company (State Automobile Mutual) have approved proposed changes to State Auto Insurance Companies’ (State Auto) intercompany pooling agreement. As of January 1, 2011, the State Auto pooling agreement will be amended to add the operating results of the insurance companies of Rockhill. Rockhill was acquired by State Automobile Mutual in February 2009. State Auto currently has an FSR of A+ (superior) and ICR of “aa-”, both with a negative outlook.
The FSR of A- (excellent) and ICRs of “a-” have been placed under review with positive implications for Rockhill Insurance Group and its following property/casualty members:
• Rockhill Insurance Company
• American Compensation Insurance Company
• Bloomington Compensation Insurance Company
• Plaza Insurance Company
A.M. Best assigned indicative ratings of “bbb-” to senior unsecured debt and “bb” to preferred stock, which may be issued under the recently filed “automatic shelf ” registration statement of Unitrin Inc. (Unitrin). The outlook assigned to both ratings is stable. The shelf expires on Nov. 2, 2013. Concurrently, A.M. Best withdrew the debt rating of “bbb-”on Unitrin’s $200 million 4.875% senior notes, which matured on Nov.1, 2010.
Unitrin’s issuer credit rating of “bbb-”and existing outstanding debt rating are unchanged.
Waco Fire and Casualty Insurance Company
A.M. Best revised the outlook to positive from stable and affirmed the financial strength rating of B+ (good) and ICR of “bbb-” of Waco Fire and Casualty Insurance Company (Waco).
The positive outlook reflects Waco’s improved risk-adjusted capital position and A.M. Best’s expectations for greater stability in premium levels and cash flows as the run off of a discontinued book of affiliated business nears completion. The run-off book of business was written on a retrospective rating basis, which resulted in fluctuations in premium volumes and, consequently, variability in operating earnings and negative operating cash flows. Large retro premiums are no longer expected, resulting in less volatile premium levels and a return to positive cash flow generation.
The ratings reflect Waco’s strong risk-adjusted capitalization, low underwriting leverage and conservative loss reserve position, as evidenced by continued favorable loss reserve development over the prior nine accident years.
