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

 

British Marine Luxembourg S.A.

S&P withdrew its 'A+' counterparty credit and financial strength ratings (FSR) on British Marine Luxembourg S.A. The ratings were withdrawn because British Marine has ceased to exist following its merger with 100% owner QBE Insurance (Europe) Ltd., the rating agency says. For this reason, the ratings were not affirmed prior to withdrawal.

Under the terms of the merger, which took effect on March 31, 2010, British Marine was dissolved and ceased to exist. All of British Marine's assets and liabilities were transferred to QBE Insurance. Similarly, QBE Insurance assumed responsibility for all of British Marine's insurance policies in force on March 31, 2010, and took on its outward insurance contracts. 

 

Coface Group

Moody's assigned a P-1 short-term insurance financial strength rating (IFSR) to Coface SA, the French credit insurance company of the Coface Group. Moody's short-term IFSRs are opinions of the ability of the insurance company to repay punctually its short-term senior policyholder claims and obligations. The ratings apply to senior policyholder obligations that mature, or are payable within one year or less.

 

The P-1 short-term rating assigned to Coface SA reflects the A2 (stable outlook) long-term IFSR of the company, as well as the good liquidity position of the company and of the Coface Group. Moody's notes that the investment portfolio of the Group is composed mainly of cash and investment grade bonds. Cash, fixed income securities and other liquid assets represented nearly 150% of Coface's net technical liabilities at year-end 2009.

 

Colina Insurance Ltd.

A.M. Best Co. affirmed the FSR of A- (excellent) and issuer credit rating (ICR) of “a-” of Colina Insurance Ltd. The outlook for both ratings is stable. Colina is a wholly owned subsidiary of its publicly traded parent, Colina Holdings Bahamas Ltd., which is majority owned by AF Holdings Ltd.

The rating affirmations are based on Colina’s leading market share in the life/health market in The Bahamas, its improved operations in the health line of business, favorable risk-adjusted capitalization and conservative reserving practices, the rating agency says.

As a life/health market leader with more than 50% market share in The Bahamas, Colina continues to leverage its competitive advantages by expanding within the islands of The Bahamas and into other Caribbean and Latin American markets. A.M. Best notes that while Colina’s earnings performance and growth in assets have primarily been achieved through several acquisitions in the past, the company’s potential for new business growth and earnings sustainability will depend on its ability to attract new business organically in a mature Bahamian life/health insurance market.

 

Farm Bureau Life Insurance Company of Michigan

A.M. Best Co. revised the outlook to stable from negative and affirmed the FSR of A (excellent) and ICR of “a” of Farm Bureau Life Insurance Company of Michigan.

The ratings reflect Farm Bureau Life’s excellent risk-adjusted capitalization and consistent earnings, A.M. Best says. The ratings also reflect the strong association with its parent organization, Michigan Farm Bureau and the benefits Farm Bureau Life receives from its affiliation with Michigan Farm Bureau’s property/casualty and multi-line agency force, which has helped Farm Bureau Life to increase life insurance premiums over the last two years. Farm Bureau Life has recorded net operating gains in each of the last five years. Increasing net investment income and profitable results from its ordinary life and individual annuity lines has driven these net operating gains. In addition, overall net income returned to more historical levels in 2009, due to the absence of realized capital losses.

 

Family Guardian Insurance Co. Ltd.

A.M. Best Co. revised the outlook to negative from stable and affirmed the FSR of A- (excellent) and ICR of “a-” of The Family Guardian Insurance Co. Limited (Family Guardian) (Nassau, Bahamas). Family Guardian is a wholly owned subsidiary of FamGuard Corp. Ltd.

The revised outlook reflects Family Guardian’s high concentration of mortgage loans relative to total equity of the company and the continued delinquencies attributed to the current weak economic environment. A.M. Best is concerned that Family Guardian’s geographic concentration of business risk and the competitive and mature life insurance marketplace in the Bahamas, coupled with a deteriorating mortgage loan portfolio and inherent risks associated with the group division led by BahamaHealth, could lead to potential challenges to income and capital going forward.

 

Reserve National Insurance Co.

S&P is keeping its 'A' counterparty credit and FSRs on Reserve National Insurance Co. on CreditWatch with negative implications. S&P placed these ratings on CreditWatch negative after Unitrin Inc. announced it reached an agreement in principle to sell Reserve National to Physicians Mutual Insurance Co. Specifically, there were uncertainties about Reserve National's capital levels after the proposed transaction and the strategic plans of its acquirer, the rating agency says. Unitrin has since announced that negotiations related to this transaction have ceased. S&P is keeping the ratings on CreditWatch because those uncertainties remain.

Unitrin is seeking a new buyer for Reserve National. S&P will resolve the CreditWatch status of the ratings following the completion of Unitrin's search for a buyer of Reserve National and the closing of any related transaction.

 

State Farm General Insurance Co.

A.M. Best Co. has revised the outlook to positive from stable and affirmed the FSR of A- (excellent) and ICR of “a-” of State Farm General Insurance Co. The revised outlook reflects State Farm General’s strong capitalization, continued favorable operating earnings and its strategic role as a member of the State Farm Group, the rating agency says. State Farm General has produced strong operating results over the previous five-year period, driven by favorable underwriting experience and solid investment income.

The favorable underwriting experience is reflective of State Farm General’s improved rate adequacy, tightened underwriting guidelines and a lack of significant catastrophe activity. As a result, State Farm General has generated substantial surplus growth, which has lowered underwriting leverage and improved risk-adjusted capitalization. The ratings also recognize the parent’s—State Farm Mutual Automobile Insurance Co.—demonstrated commitment to this separately capitalized California entity, by previously funding a $200 million surplus note and continuing to provide significant catastrophe reinsurance protection.

 

State Farm Group, its members and core life affiliates

A.M. Best Co. has affirmed the FSR of A++ (superior) and ICR of “aa+” of State Farm Group, its property/casualty members and core life affiliates. A.M. Best also has affirmed the FSRs and ICRs of other select property/casualty members and life affiliates. The outlook for these ratings is stable.

The ratings reflect State Farm Group’s superior capitalization, moderate five-year operating performance and dominant business profile with strength of brand and market presence as the largest property/casualty writer in the United States. State Farm Group maintains a significant capital base with correspondingly modest underwriting leverage relative to industry norms.

The FSRs of A++ (Superior) and ICRs of “aa+” have been affirmed for State Farm Group and its following property/casualty members and core life affiliates:

• State Farm Mutual Automobile Insurance Co.

• State Farm County Mutual Insurance Company of Texas

• State Farm Life Insurance Co.

• State Farm Life and Accident Assurance Co.

 

State Farm Indemnity Group and its member

A.M. Best Co. revised the outlook to negative from stable, and affirmed the FSR of A- (excellent) and ICRs of “a-” of State Farm Indemnity Group and its member, State Farm Indemnity Co.

The ratings reflect State Farm Indemnity Group’s strong risk-adjusted capitalization and market presence as one of the leading private passenger automobile writers in New Jersey. The negative outlook is based on State Farm Indemnity Group’s continued significant deterioration in operating performance in recent years.

The ratings are based on the consolidation of State Farm Indemnity Co. and its wholly owned and unrated subsidiary, State Farm Guaranty Insurance Co.

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