Allstate, New York Life and 15 Others See Ratings Updates
AIG, Allianz receive outlook revisions; Berkshire Hathaway, Old Republic, Sun Life and USAA also see updates.
Insurance Networking Ratings Corner, January 31, 2012
A.M. Best, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s (S&P’s) released ratings updates. The following are some of the most recent:
American International Group Inc. and its subsidiaries
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A.M. Best has revised the outlook to stable from negative and affirmed the issuer credit rating (ICR) of “bbb” of American International Group Inc. (AIG). Concurrently, A.M. Best has revised the outlook to stable from negative and affirmed the financial strength ratings (FSR) of A (Excellent) and ICRs of “a” of Chartis US Insurance Group and its members as well as the Lexington Insurance Pool and its members.
A.M. Best also has revised the outlook to stable from negative and affirmed the FSR of A (Excellent) and ICRs of “a” of the domestic life/health subsidiaries of AIG, collectively referred to as SunAmerica Financial Group (SAFG). Additionally, A.M. Best has upgraded the FSR to A- (Excellent) from B++ (Good) and the ICR to “a-” from “bbb+” for The Fuji Fire & Marine Insurance Co. Ltd. (Fuji). These ratings have been removed from under review with positive implications and assigned a stable outlook.
A.M. Best Europe has assigned a FSR of A (Excellent) and ICRs of “a” to Chartis Europe Ltd. and Chartis Europe S.A. The outlook assigned to these ratings is stable.
A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a” of the domestic life/health subsidiaries of American International Group Inc. AIG’s domestic life/health companies are referred to collectively as SunAmerica Financial Group (SAFG).
A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of AIU Insurance Co. (AIU). The outlook for these ratings remains negative. Concurrently, A.M. Best has affirmed the FSR of B+ (Good) and ICR of “bbb-” of American General Property Insurance Co. (AGPIC). The outlook for these ratings has been revised to stable from negative.
All companies are subsidiaries of AIG.
S&P has revised the outlook on its long-term counterparty credit and insurer financial strength ratings on Germany-based global multiline insurer Allianz SE – and related core and strategically important subsidiaries – to negative. S&P removed all ratings from CreditWatch, where they were placed with negative implications on Dec. 9, 2011. At the same time, S&P affirmed the 'AA' long-term ratings on Allianz SE and its core subsidiaries, as well as the 'AA-' ratings on affected strategically important subsidiaries.
The outlook revision reflects S&P’s view that capital adequacy has weakened to a level close to the ratings agency’s minimum expectations for the current ratings and the risk that it could weaken further, in light of economic pressures in the eurozone, coupled with challenging financial market conditions.
Allianz SE's capitalization weakened to a strong from a very strong level in the second half of 2011. S&P believes that the recent downgrade of some eurozone sovereign issuers has further increased the group's risk capital requirements, particularly in light of its exposure to Italy. This adds to the pressure arising from historically low interest rates, increased credit spreads, and volatile equity markets, which substantially weakened the group's capital position in 2011. Allianz' material exposure to eurozone sovereign issuers and their economies may further weaken its business and financial profile, if economic prospects remain dampened or if credit risk relating to investments were to increase.
The Allstate 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 Allstate Insurance Group (Allstate) and its members. Additionally, A.M. Best has assigned a debt rating of “a-” to the newly issued $500 million, 5.2% 30-year senior unsecured notes, while affirming the ICR of “a-” and existing debt ratings of Allstate’s parent, The Allstate Corp. (Allcorp). Concurrently, A.M. Best has upgraded the FSR to A+ (Superior) from A (Excellent) and the ICR to “aa-” from “a” of North Light Specialty Insurance Co. (North Light). In addition, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of “a-” of First Colonial Insurance Co. (First Colonial). The outlook for these ratings is stable.
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