14 Insurers See Ratings Changes
Insurance Networking News, November 17, 2009
A.M. Best, Fitch Ratings and Moody’s announced ratings updates. The following are some of the most recent:
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Moody's Investors Service cut the financial strength rating (FSR) on Assured Guaranty Ltd.'s bond insurance unit to Aa3 from Aa2, according to The Wall Street Journal. Moody’s said another downgrade is possible, and the bond insurer responded by pledging to keep its ratings from dropping more.
Moody's affirmed the rating on Assured Guaranty’s municipal finance insurer Assured Guaranty Municipal Corp., but maintains a negative outlook, WSJ reports. Moody's downgraded Assured Guaranty Corp. to Aa3 from Aa2, and downgraded the reinsurance unit, Assured Guaranty Re, to A1 from Aa3 on the lack of business opportunities to reinsure other insurers. Both remain on review for an additional downgrade.
AVIVA plc and its subsidiaries
A.M. Best Co. affirmed the FSR of A (excellent) and issuer credit ratings (ICR) of “a+” for the subsidiaries of the non-operating holding company, AVIVA plc (AVIVA). A.M. Best also affirmed the ICR of “a-” and the ratings on the debt securities issued by AVIVA. Additionally, A.M. Best has withdrawn the FSR of A (excellent) and ICR of “a+” for AVIVA Courtage after its business was merged into AVIVA Vie in 2008. The outlook for all ratings is stable.
The ratings reflect AVIVA’s improving risk-adjusted capitalization and financial performance, resulting from improving market conditions, management initiatives and its diversified business model. Offsetting factors are the increase in financial leverage, as well as operational risks associated with AVIVA’s ongoing restructuring of its European operations.
China Taiping Insurance (Singapore) Pte. Ltd.
A.M. Best affirmed the FSR of B++ (good) and ICR of bbb+ of China Taiping Insurance (Singapore) Pte. Ltd. (formerly China Insurance Co. [Singapore] Pte. Ltd.) The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the ratings and assigned a NR-4 to the FSR and “nr” to the ICR. This action reflects China Taiping Insurance (Singapore) Pte. Ltd. management’s decision to withdraw from A.M. Best’s interactive rating process.
The ratings reflect China Taiping Insurance (Singapore) Pte. Ltd.’s consistent improvement in its overall underwriting performance and adequate risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio, the rating agency says. Partially offsetting rating factors include the company’s continued unprofitable underwriting results from its motor line of business.
A.M. Best and Fitch announced their latest rating actions on CNA Financial Corp.’s $350 million issue of senior unsecured notes, due 2019. A.M. Best assigned a debt rating of “bbb.” The assigned outlook is negative.
Fitch Ratings has assigned a 'BBB-' rating. The rating outlook remains negative. The ratings of CNA and its insurance company subsidiaries are not affected by this action, however, the ratings are subject to an ongoing review by Fitch, which could result in near-term rating actions.
CNA intends to use the net proceeds of the senior unsecured notes issuance to redeem $250 million of the $1.25 billion of cumulative senior perpetual preferred stock it issued to its parent, Loews Corp., in November 2008. CNA plans to use the remaining proceeds for general corporate purposes.
A.M. Best affirmed the FSA of A (excellent) and ICR of “a” of Dongbu Insurance Co. Ltd. The outlook for both ratings is stable.
The ratings reflect Dongbu’s solid market profile, sound underwriting performance and adequate capitalization level. According to the rating agency, Dongbu has maintained a market share of 15% in terms of direct premiums written, remaining the third-largest non-life insurer in South Korea for three consecutive years. Its five-year average operating ratio stood at 92% and compared favorably to its peers.
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