9 Insurers See Ratings Changes
Insurance Networking News, March 2, 2010
A.M. Best, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s (S&P) released ratings updates. The following are some of the most recent:
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American International Group Inc. and its domestic property/casualty subsidiaries
Fitch Ratings and Moody's Investors Service responded to AIG’s announcement of results for the fourth quarter and full year of 2009. Fitch Ratings placed the 'A+' insurer financial strength (IFS) ratings of American International Group Inc.'s domestic property/casualty subsidiaries on rating watch negative. Fitch has placed the following 'A+' IFS ratings on rating watch negative:
• Chartis Property Casualty Co.
• American Home Assurance Co.
• Chartis Casualty Co.
• Commerce and Industry Insurance Co.
• Granite State Insurance Co.
• Illinois National Insurance Co.
• National Union Fire Insurance Company of Pittsburgh, PA
• New Hampshire Insurance Co.
• The Insurance Company of the State of Pennsylvania
• Chartis Select Insurance Co.
• Landmark Insurance Co.
• Lexington Insurance Co.
• AIU Insurance Co.
• Chartis Specialty Insurance Co.
• Chartis MEMSA Insurance Co.
• Chartis UK Ltd.
• Chartis Overseas Ltd.
AIG's issuer default rating (IDR), the ratings on the company's senior unsecured and hybrid securities, and ratings on AIG's other affiliated insurance and non-insurance companies are not affected by these actions.
Moody's affirmed the ratings of American International Group Inc. Also affirmed were the Aa3 insurance financial strength ratings (IFSRs) of Chartis U.S. and the A1 IFSRs of SunAmerica Financial Group (SFG). The rating affirmations reflect the strong market presence of Chartis and SFG, a general stabilization of these businesses since AIG's credit crisis in 2008, and Moody's understanding that the government will continue to support AIG throughout its restructuring. The rating outlook for AIG and Chartis remains negative. The rating outlook for SFG has been changed to negative from developing, given that these operations are no longer for sale.
The current ratings of AIG and its core subsidiaries reflect uplift from their stand-alone credit profiles given the government support, Moody’s says. The ratings are positioned at levels expected to be appropriate for the group on a stand-alone basis when the restructuring is complete and the government's support and ownership of AIG ends.
Capital City Insurance Co. Inc.
A.M. Best Co. upgraded the financial strength rating (FSR) to A (excellent) from B++ (good) and the issuer credit rating (ICR) to “a” from “bbb+“ of Capital City Insurance Co. Inc. The ratings have been removed from under review with negative implications, and assigned a stable outlook.
These rating actions on Capital City specifically reflect the explicit support provided to it by an affiliate, General Casualty Company of Wisconsin, in the form of a loss portfolio reinsurance agreement and a 100% quota share reinsurance agreement, both of which became effective Oct. 1, 2009, the rating agency says. The reinsurance agreements were recently executed following the receipt of regulatory approval.
Liberty Mutual Group Inc. subsidiaries
A.M. Best Co. has withdrawn the FSR of A (excellent) and ICR of “a” of American Ambassador Casualty Co. and Globe American Casualty Co. and assigned a category NR-5 to the FSRs and an “nr” to the ICRs.
These rating actions follow confirmation that each entity was merged into subsidiaries of Liberty Mutual Group Inc. (LMGI), and therefore, no longer exists.
Effective Oct. 21, 2009, American Ambassador Casualty Co. was merged into Peerless Indemnity Insurance Co., while effective Dec. 30, 2009, Globe American Casualty Co. was merged into The Midwestern Indemnity Co.
In April 2009, A.M. Best affirmed the FSRs of A (excellent) and ICRs of “a” of the members of the Liberty Mutual Insurance Cos. pool and Peerless Insurance Company Pool, as well as the ICRs of “bbb” of Liberty Mutual Holding Co. Inc. and LMGI. The outlook for all ratings is negative.
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