11 Insurers See Ratings Updates
Chubb Corp., Penn National and 9 others receive updates.
Insurance Networking Ratings Corner, March 12, 2013
A.M. Best, Fitch Ratings, and Standard & Poor’s (S&P’s) released ratings updates. The following are some of the most recent:
Fitch has affirmed the ratings of Alleghany Corp. (Alleghany) as follows:
• Issuer Default Rating (IDR) at 'A-'
• Senior debt at 'BBB'.
Fitch also has affirmed the ratings of Alleghany's wholly owned subsidiary Transatlantic Holdings Inc. (Transatlantic) as follows:
• IDR at 'A-'
• Senior debt at 'BBB+'.
In addition, Fitch has affirmed the 'A+' Insurer Financial Strength (IFS) rating of Transatlantic's property/casualty reinsurance subsidiaries and the 'A' IFS rating of RSUI Group Inc.'s (RSUI) property/casualty insurance subsidiaries. The Rating Outlook is Stable.
Fitch's affirmation of Alleghany's ratings reflects the company's conservative capitalization, reasonable financial leverage, sizable cash position and favorable financial flexibility. The ratings also reflect operating challenges in the highly competitive, property/casualty (re)insurance market, integration risk from the acquisition of Transatlantic and potential exposure to adverse reserve development on sizable casualty reserves.
American Family Mutual Insurance Co.
Fitch has affirmed the 'A' Insurer Financial Strength (IFS) rating of American Family Mutual Insurance Co. (American Family). The Rating Outlook is Stable.
The rating action reflects American Family's strong market position in the Midwest and very strong capitalization with negligible financial leverage and moderate operating leverage. The company has demonstrated its ability to replenish capital, following multiple years of large losses. Balanced against these strengths was improved, but still pressured, 2012 operating performance with storm losses of roughly $840 million. The company reported poor results in 2011 as a result of record-high storm losses, reaching nearly $1.2 billion of gross losses.
As of Dec. 31, 2012, policyholders' surplus increased by more than $500 million, or 11 percent, from year-end 2011 to $5.2 billion, primarily due to realized investment gains and reduced catastrophe losses. Despite record-high losses in 2011, Fitch notes that the company's surplus increased 2 percent in 2011 to $4.7 billion, primarily from realized investment gains.
Blue Cross of Idaho Health Service Inc.
Fitch has affirmed Blue Cross of Idaho Health Service Inc.'s (BCID) Insurer Financial Strength (IFS) rating at 'A-'. The Rating Outlook is Stable.
Fitch's rating on BCID reflects the company's excellent competitive position in the Idaho health insurance market, strong balance sheet, and good operating performance. The rating also reflects the company's limited geographic diversification, small scale relative to national and multi-state competitors, and uncertainty derived from the evolving regulatory environment.
Fitch's Stable Outlook reflects the agency's expectation that BCID's earnings, capital and market position will remain relatively unchanged during the next 12 to 24 months. BCID's primary business is selling health insurance products and services in the state of Idaho under the Blue Cross trademark. The company has a leading market position in the state of Idaho, providing health insurance coverage to about 439,000 medical and 278,000 standalone dental members as of Sept. 30, 2012.
The Chubb Corp. and its subsidiaries
A.M. Best has affirmed the financial strength rating (FSR) of A++ (Superior) and issuer credit ratings (ICR) of “aa+” of the property/casualty subsidiaries of The Chubb Corp. (Chubb Corp), also known as the Chubb Group of Insurance Co.s (Chubb Group). Concurrently, A.M. Best has affirmed the ICR of “aa-”, all long-term debt and indicative ratings and the AMB-1+ on the commercial paper of Chubb Corp. In addition, A.M. Best has affirmed the FSR of A++ (Superior) and ICR of “aa+” of Chubb Atlantic Indemnity Ltd. (Chubb Atlantic). The outlook for all ratings is stable, except for the commercial paper, which does not have an outlook.
The ratings reflect the Chubb Group’s superior risk-adjusted capitalization, excellent underwriting and overall operating performance, and the sustainable competitive advantages within its specialty and upscale personal insurance businesses, which is demonstrated by its consistent outperformance of industry peers. The ratings also recognize Chubb Group’s comprehensive and proactive enterprise risk management, disciplined underwriting practices, strong franchise recognition and access to the capital markets through Chubb Corp. The group’s positive rating attributes are enhanced by its position as a leading insurer in the United States and its global presence in specialty markets.
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