13 Insurers See Ratings Change
Insurance Networking News, November 3, 2009
A.M. Best, Fitch Ratings, Moody’s released ratings updates. The following are some of the most recent:
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Arbella Insurance Group and its members
A.M. Best Co. upgraded the financial strength rating (FSR) to A- (excellent) from B++ (good) and issuer credit ratings (ICR) to “a-” from bbb+ of Arbella Insurance Group (Arbella) and its members. Arbella consists of Arbella Mutual Insurance Co., majority-owned subsidiaries Arbella Protection Insurance Co., Arbella Indemnity Insurance Co., Commonwealth Reinsurance Co., Covenant Insurance Co. (Southbury, CT) and reinsured affiliate Commonwealth Mutual Insurance Co. The outlook for all ratings has been revised to stable from positive.
The rating upgrades reflect Arbella’s surplus growth and strong risk-adjusted capitalization following its improved underwriting performance, which is due mainly to favorable loss experience and reduced underwriting leverage over the past several years.
A.M. Best Co. assigned an FSR of B+ (Good) and ICR of bbb- to Associated Mutual (AM). The assigned outlook is stable.
The ratings reflect AM’s position as a niche player in the public employees and labor union market in Michigan. The company exhibits strong potential for growth, and has high persistency measures, the rating agency says. Its capital balance and strong risk-based capital scores raise the potential for strategic business opportunities and alliances.
Aurigen Reinsurance Co. and Aurigen Reinsurance Ltd.
A.M. Best Co. affirmed the FSR of A- (excellent) and ICR of “a-” of Aurigen Reinsurance Co. and Aurigen Reinsurance Ltd. The outlook for all ratings is stable.
The ratings of Aurigen are based upon the start-up nature of the operation, which is focused on the Canadian life reinsurance marketplace and adequate capitalization, offset by a first-year operating loss.
Over the past year, the Canadian life reinsurance market has experienced some volatility in conjunction with the economic environment. Despite the global economic challenges, Aurigen successfully completed its first significant reinsurance transaction, and has indicated that it is gaining traction in concluding additional transactions.
A.M. Best Co. affirmed the FSR of A (excellent) and ICR of “a” of Beazley Insurance Co. Inc. (BICI) The outlook for both ratings is stable.
These ratings reflect BICI’s strong stand-alone, risk-adjusted capitalization, as well as the explicit support provided through quota share reinsurance agreements with Lloyd’s Syndicate 2623 and Lloyd’s Syndicate 623, which are managed by Beazley plc (Beazley) (Jersey). In addition, BICI benefits from third-party credit risk protection provided by Beazley.
A.M. Best Co. removed from under review with developing implications and affirmed the FSR of A (excellent) and ICR of “a” of BMO Life Assurance Co. (BMOLAC). The assigned outlook for both ratings is stable.
The rating actions follow the completion of A.M. Best’s review of the acquisition of BMOLAC (formerly AIG Life Insurance Company of Canada). The ratings were placed under review with developing implications following the announcement that Bank of Montreal (BMO) had agreed to purchase AIG Life Insurance of Canada from American International Group Inc. The company was renamed BMO Life Assurance Co. following the close of the transaction.
Fremont Insurance Co. and Fremont Michigan InsuraCorp Inc.
A.M. Best Co. upgraded the FSR to A- (excellent) from B++ (good) and ICR to “a-” from bbb+ of Fremont Insurance Co. (Fremont). A.M. Best also upgraded the ICR to bbb- from bb+ of its parent holding company, Fremont Michigan InsuraCorp Inc. The outlook for all ratings has been revised to stable from positive.
The ratings and outlook reflect Fremont’s solid capitalization, favorable operating earnings and its well-established presence as a writer of personal lines insurance in Michigan, the rating agency says. The company’s capital position reflects its moderate underwriting leverage, conservative investment risk profile and favorable loss reserve development. Strong underwriting results and steadily increasing investment income over the previous five-year period have driven Fremont’s operating earnings.
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