A.M. Best Co. released ratings updates. The following are some of the most recent:
Atlantic Insurance Co.
The rating agency has withdrawn the financial strength rating of A+ (“superior”) and issuer credit rating of aa- of Atlantic Insurance Co., and assigned a category NR-5 (“not formally followed”) to the FSR and an “nr” to the ICR.
Atlantic Insurance was purchased by Scottsdale Insurance Co. from The Travelers Indemnity Co.. Scottsdale is a wholly owned subsidiary of Nationwide Mutual Insurance Co., and a member of Nationwide Group.
A.M. Best also downgraded the issuer credit rating (ICR) to a- from a of the non-operating holding company, Aviva plc and the financial strength rating (FSR) to A (“excellent”) from A+ (“superior”) and the ICRs to a+ from aa- of its rated subsidiaries. The ratings firm also downgraded the debt securities issued by Aviva. The outlook for all ratings is “stable.”
Aviva’s downgrade follows the company’s negative bottom line financial performance, and a reduction in risk-based capitalization, resulting from investment losses of GBP 2 billion that the company reported in its 2008 results. The losses were incurred following the continuing equity market turmoil and widening credit spreads on its investment portfolio. A.M. Best is concerned about the level of shareholders’ asset risk associated with Aviva’s global corporate bond portfolio backing its life and GI businesses (amounting to GBP 26 billion), where the investment mix includes 30% of assets rated BBB or lower.
Evergreen Reinsurance Co. Ltd.
The rating agency affirmed the financial strength rating of A (“excellent”) and issuer credit rating of a of Evergreen Reinsurance Co. Ltd. The outlook for both ratings is “stable.”
The Evergreen Re ratings reflect excellent capitalization, strong operating performance and its unique role as the primary insurance carrier for its parent, Evergreen Group, A.M. Best says. These positive rating factors are derived from the company's conservative underwriting standards, low-cost operating structure and multiple product line book of business and broad geographic exposure base.
Fireman’s Fund Insurance Co.
Following an announcement that Fireman’s Fund Insurance Co. of Georgia has merged with American Insurance Co., its parent company, A.M. Best Co. has withdrawn the financial strength rating (FSR) of A (“excellent”) and issuer credit rating (ICR) of a. The rating agency also assigned a category NR-5 (“not formally followed”) to the FSR and an “nr” to the ICR of the insurer.
American Insurance Co. is a member of the Fireman’s Fund Insurance Cos.
United Automobile Insurance Group
A.M. Best Co. downgraded the financial strength rating to C (“weak”) from B- (“fair”) and issuer credit ratings to ccc from bb- for United Automobile Insurance Group (United Auto) and its lead member, United Automobile Insurance Co. The outlook for all ratings has been revised to “negative” from “stable.”
These rating actions reflect the substantial decline in United Auto’s risk-adjusted capitalization following significant reserve strengthening actions in 2008 that were related to 2006 and prior accident years, primarily in its personal injury protection line of business, A.M. Best says.
The rating agency affirmed the financial strength rating of A- (“excellent”) and the issuer credit rating of a- of UNUM Ltd. The outlook for both ratings is “stable.”
The ratings reflect UNUM’s market leadership in its core segments, stable operating profitability and strong risk-adjusted capitalization, A.M. Best says. Offsetting factors are lower growth rates in face of competitive pressures combined with falls in fair values of the investment portfolio.
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