S&P affirmed its 'A-' long-term counterparty credit rating on Aetna Inc. (NYSE:AET). The agency also said that it affirmed its 'A+' counterparty credit and financial strength ratings on Aetna Inc.'s core operating company, Aetna Life Insurance Co. (ALIC). In addition, we affirmed our 'A' counterparty credit and financial strength ratings Aetna's strategically important operating companies. The outlook on all of these companies remains negative. "Aetna's business and financial profile is strong compared with its peers', despite some material adverse development related to medical cost trends," said credit analyst Joseph Marinucci. "Overall, we believe the company remains reasonably well positioned to sustain its credit profile amid limited near-term prospects for growth and heightened competitive intensity in the marketplace."
04.13.10

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A.M. Best Co. upgraded the financial strength rating to A (Excellent) from A- (Excellent) and issuer credit ratings to "a" from "a-"of Housing Authority Insurance Group and its members, Housing Authority Risk Retention Group, Inc., Housing Authority Property Insurance, A Mutual Company and Housing Enterprise Insurance Company. The outlook for all ratings is being revised to stable from positive. All companies are domiciled in Burlington, VT. These companies are public housing authority owned and are controlled insurance operating units of Housing Authority. The ratings reflect the group's excellent capitalization, very strong operating results, and leading position and proven expertise in the niche public housing authority market. Partially offsetting these positive rating factors is the group's concentration of risk in the public housing authority sector, which magnifies the impact of market cycles and public policy and legislative changes. Housing Authority provides property and liability coverages to public housing authorities and their affiliated operations throughout the United States. While retaining a large percentage of its member-insureds and regularly adding new members, the group maintains a market share of about 40% of this segment on a per unit basis. With its solid operating performance, Housing Authority progressively has built up its surplus through retained earnings, and its underwriting leverage is very low. The group's underwriting results remain strong due to its focused and disciplined underwriting approach and conservative reserving. Over the years, it has increased rates when appropriate and withdrawn from problematic accounts and lines of business, such as workers' compensation. In addition, Housing Authority's operating performance benefits significantly from its tax efficient structure and strong client relationships supported by a number of customized programs and services. The ratings also recognize management's conservative operating strategy consistent with the member-insureds' expectations. Housing Authority maintains conservative investment portfolios, and it utilizes reinsurance prudently.
04.09.10

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A.M. Best Co. affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of American Family Life Assurance Company of Columbus , Omaha, NE, American Family Life Assurance Company of Columbus (Japan Branch) and its wholly-owned subsidiary, American Family Life Assurance Company of New York, New York, NY. In addition, A.M. Best has upgraded the FSR to A+ (Superior) from A (Excellent) and ICR to "aa-"from "a" of Continental American Insurance Company, Columbia, SC. Concurrently, A.M. Best has affirmed the ICR of "a-" and all existing debt ratings of the ultimate parent, Aflac, Inc., Columbus, GA [NYSE: AFL]. The outlook for all ratings is stable. Aflac's ratings reflect its solid capital position, favorable statutory and GAAP operating results and strong brand recognition. During 2009, Aflac raised $1.4 billion through U.S. public debt offerings and loans. A.M. Best notes that Aflac's financial leverage remains below 25%, which is consistent with its current ratings. The operating companies' capitalization was supported by Aflac's $500 million capital contribution, which helped to partially offset the sizable capital losses incurred last year.
04.09.10

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A.M. Best Co. upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and issuer credit rating (ICR) to "a" from "a-" of American Summit Insurance Company. The outlook for these ratings has been revised to stable from positive. Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of "a+" of National Lloyds Insurance Company (National Lloyds), an affiliate of American Summit. The outlook for these ratings is stable. Both companies are subsidiaries of Hilltop Holdings Inc. (HTH), headquartered in Dallas, TX, [NYSE: HTH]. Additionally, A.M. Best has assigned an ICR of "bbb+" to HTH with a stable outlook. All companies are domiciled in Waco, TX, except where specified. HTH currently operates as an insurance holding company, although it intends to make opportunistic acquisitions on an ongoing basis. These rating actions on American Summit recognize its solid risk-adjusted capitalization, geographic spread of risk in moderately catastrophe prone areas and its continued profitable underwriting performance. In addition, the ratings reflect prudent risk management strategies and underwriting initiatives, which continue to enhance operating performance. These positive rating factors are somewhat offset by American Summit's elevated underwriting expense ratio and low investment yields. The rating actions on National Lloyds reflect its solid risk-adjusted capitalization, favorable operating performance in recent years and local market expertise within its niche of the personal property insurance market. These positive rating factors are somewhat offset by National Lloyds' geographic concentration of risk primarily in the Texas marketplace, with susceptibility to frequent and severe weather related events. As a result, the company posted underwriting losses in 2008 and 2009, due to multiple hurricane and tornado/hail events. However, National Lloyds continues to improve its underwriting guidelines in an effort to reduce inherent risk.
03.08.10

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A.M. Best Co. downgraded the financial strength rating (FSR) to B+ (Good) from B++ (Good) and the issuer credit rating (ICR) to "bbb-" from "bbb" for First Beacon Insurance Company, Burlington, VT, a captive insurer of Alcatel-Lucent. The outlook for both ratings remains negative. The rating actions reflect concerns over the financial position of First Beacon's ultimate parent, Alcatel-Lucent. Supporting the rating is a robust level of risk-adjusted capitalisation and a stable operating performance. A.M. Best has concerns at Alcatel-Lucent's long-term business profile and financial strength. The 2009 financial year witnessed a 10.8% fall in revenue and a third successive year of overall losses for the company. Although Alcatel-Lucent maintains a good range of products, demand remains weak and competition is strong. First Beacon's business profile is largely dependant on the economic success of Alcatel-Lucent and any additional deterioration in the financial position of the parent is likely to add further pressures to the captive's rating level. The upholding of substantial levels of capital within First Beacon supports what A.M. Best considers to be a good level of risk-adjusted capitalisation. Furthermore, regulatory requirements to maintain a good level of capital and surplus give A.M. Best some confidence that First Beacon will maintain its current capital position. Although FBIC has witnessed a substantial decrease in premium income over recent years, the captive's combined ratio has remained relatively stable within the range of 75% to 90%. A.M. Best anticipates that operating performance is likely to be maintained within this range over the next two years.
04.07.10

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A.M. Best Co. upgraded the financial strength rating to A (Excellent) from A- (Excellent) and issuer credit rating to "a" from "a-"of Rockingham Casualty Company. The outlook for both ratings is stable. The upgrading of Rockingham Casualty's ratings is a result of it becoming a fully-reinsured affiliate of Rockingham Mutual Insurance Company via a quota share agreement effective Jan. 1, 2010. Rockingham Casualty is a wholly-owned subsidiary of Rockingham Mutual, and together they form Rockingham Group. Both Rockingham Casualty and Rockingham Mutual are domiciled in Harrisonburg, VA.
04.07.10

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Moody's upgraded the surplus note rating of Pennsylvania National Mutual Casualty Insurance Company to Baa3 from Ba1. In the same action, Moody's upgraded the insurance financial strength ratings of the group's primary insurance companies to A3 from Baa1. The outlook for the ratings is stable.
"The ratings' upgrades on Penn National Insurance reflect the group's progress in building a more diversified portfolio of businesses, steady profitability and strong capitalization despite the turmoil in the broader financial markets as well as its relatively low financial leverage profile," said Enrico Leo, analyst at Moody's.
04.07.10

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S&P lowered its counterparty credit and financial strength ratings on Primerica Life Insurance Co. (PLIC) to 'AA-' from 'AA' and removed them from CreditWatch, where they were placed on Nov. 9. 2009, with negative implications. S&P also said that the outlook on PLIC is stable. "The downgrade reflects our assessment of PLIC's structural changes and their impact on the company's financial profile, namely its operating performance and capitalization," noted credit analyst Ferris Joanis. As part of its restructuring, PLIC has reinsured about 90% of its stable in-force life insurance business to Citigroup Inc. As a result, we believe that PLIC's future earnings will be moderately more susceptible to volatility risk. With its source of recurring premiums significantly reduced, we believe PLIC's earnings will rely more heavily on new sales and therefore be exposed to greater variability. Furthermore, PLIC's nonlife earnings, which are inherently more volatile, will constitute a greater portion of total earnings. Overall, we expect that PLIC's profitability will decline only slightly compared with historical levels and will likely remain very strong, with a GAAP return on revenue of at least 20%. To a lesser extent, the downgrade also reflects our expectation that PLIC's liquidity will weaken somewhat, given that the company will have a much smaller pool of assets to draw upon to meet any liquidity needs. In addition, we believe the company's financial flexibility will be somewhat more constrained, given the introduction of $300 million of new debt in the organization in the form of a Citigroup Inc. note. S&P continues to view PLIC's business profile as a leading strength of the ratings. We believe that the company's unique distribution model will remain unchanged and continue to support its very strong niche competitive position in the term life insurance market. The stable outlook reflects our expectation that PLIC will maintain its leading position in the U.S. term life insurance market. We believe that the company will maintain very strong profitability as it grows its insurance business and that capitalization will remain strong at an 'A' level redundancy or higher. "We could lower the ratings again if capitalization and profitability fall short of our expectation for the current ratings and risk profile," Mr. Joanis added. "An upgrade is unlikely in the short to medium term given the changes in PLIC's financial profile."
04.01.10

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S&P affirmed its 'A-/A-1' counterparty credit ratings on American International Group Inc. (AIG). The agency also affirmed its 'A+' counterparty credit and financial strength ratings on its insurance subsidiaries, Chartis and SunAmerica Financial Group. The outlook remains negative. "The counterparty credit rating on AIG reflects our opinion of the extraordinary support from the U.S. government in light of AIG's perceived status as a highly systemically important U.S. financial institution, as well as our view of the company's 'A+' rated multiline insurance subsidiaries," said S&P credit analyst Kevin Ahern. S&P expects the government support to continue during AIG's period of stress. The long-term counterparty credit rating on AIG includes a five-notch uplift from its assessment of the company's stand-alone 'BB' credit profile and takes into consideration the level of extraordinary government support currently provided to the company. S&P does not anticipate any increase in this support at this time. "We revised our assessment of AIG's stand-alone credit profile to 'BB' from 'BB-' to reflect the company's continued momentum in reestablishing its multiline insurance market presence through its Chartis and SunAmerica operations, good progress in the unwinding of AIG Financial Products Corp., and the improved liquidity position of its noninsurance operations," said Ahern." In addition, S&P believes AIG's recently announced transactions reflect solid progress in its challenging restructuring plan." The outlook on the stand-alone credit profile is positive because S&P believes the successful closing of the two major acquisitions in the fourth quarter of 2010 likely will improve AIG's financial profile. As a result, the agency could upwardly revise its assessment of the company's stand-alone credit profile by two notches to investment grade. The 'A+' financial strength ratings on Chartis and related property/casualty (P/C) insurance companies reflect S&P's view of a strong global P/C franchise that is well diversified by geographic location and product line. The ongoing challenges of retaining customers and key employees while continuing to generate very profitable business somewhat offset the rating strengths, in S&P's opinion. The 'A+' financial strength ratings on the SunAmerica Financial Group (the U.S. life and retirement companies) reflect the agency's view of its very strong, albeit weakened, competitive profile; improving operating performance, which reflects positive investment markets; and a meaningful decline in its surrender activity from peak levels. Offsetting these strengths is the ongoing pressure on capital as more investment losses in the life operations could affect the agency's view of capital.
04.01.10

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S&P revised the outlooks on the various operating entities of Switzerland-based insurance group Zurich Financial Services (collectively ZFS) to stable from negative. ZFS includes Switzerland-based Zurich Insurance Company Ltd. (ZIC), Ireland-based Zurich Insurance PLC, and the members of the Zurich U.S. Intercompany Pool. At the same time, the 'AA-' long-term counterparty credit and insurer financial strength ratings on ZFS' core operating companies were affirmed. "The outlook revision reflects a recovery in ZFS' risk-based capital adequacy, which we view as strong. We expect the group to maintain strong capitalization based on its very strong operating performance, strong enterprise risk management capabilities, and various measures implemented to reduce risk from the balance sheet," said Standard & Poor's credit analyst Hiltrud Besgen. The ratings are further supported by what we regard as ZFS' very strong competitive position. These strengths are partly offset in our view by the fact that ZFS' capitalization, although improved, remains a relative rating weakness. Moreover economic conditions remain difficult, which we believe may impede ZFS' progress in implementing further rate increases as well as limit opportunities for further business and earnings growth.
03.31.10

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S&P raised its financial strength rating on Pacific Life Re Ltd. (PLR) to 'AA-' from 'A-'. The outlook is negative. "The rating action is based on PLIC's unconditional guarantee of PLR's reinsurance obligations," said S&P credit analyst Jeff Watson. The guarantee from PLIC has been layered on top of a similar guarantee from Pacific LifeCorp (PLC; A-/Negative/--), which is the ultimate parent of both PLIC and PLR. "These explicit support agreements satisfy our guarantee criteria. This means that the insurer financial strength rating on PLR is the same as, and will move in tandem with, the rating on PLIC. According to our criteria, the unconditional guarantee that PLIC provides supersedes the concurrent guarantee from PLC," said Watson.
03.30.10

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A.M. Best Co. revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Atlantic Casualty Insurance Company, Goldsboro, NC. The positive outlook reflects the improvement in Atlantic Casualty's risk-adjusted capitalization through year-end 2009 and continued solid operating earnings, despite the negative impacts of ongoing competitive and recessionary pressures and expectations that results will continue to trend favorably.
03.30.10

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Moody's lowered the rating of the senior unsecured debt of Ambac Financial Group Inc. to C from Ca, and placed the Caa2 insurance financial strength ratings (IFSR) of Ambac Assurance Corporation (AAC) on review for possible upgrade. Moody's also placed the Caa2 IFSR for Ambac Assurance UK Limited (AUK) on review with direction uncertain. The review for upgrade of AAC's financial strength rating reflects the enhanced credit profile of general account policyholders following the group's restructuring. Policies allocated to the segregated account have been effectively subordinated to the policies remaining in the general account, said Moody's. The general account's insured book contains mainly less risky public finance securities, largely free of legacy risks, and appears to be well supported by the corresponding claims paying resources (such as loss reserves and unearned premiums) and surplus notes to fund future reinsurance claims. The surplus notes are subordinated to general account's insurance claims. Moody's said that the potential for upward rating movement is tempered, however, by charges related to potential lawsuits and AAC's inability to write new business before the full repayment of the surplus notes. During its review, Moody's will evaluate the full impact of the restructuring on AAC's financial strength, including the extent to which senior unsecured policyholders of the general account are truly insulated from segregated account losses. Moody's believes that policies allocated to the segregated account are no longer appropriately considered to be senior policyholder obligations of AAC and that, consequently, Moody's insurance financial strength rating for AAC would not apply to such exposures.
03.26.10

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S&P revised its counterparty credit, financial strength, and financial enhancement ratings on Ambac Assurance Corp. (Ambac) to 'R' from 'CC'. "We took this action following a directive by the Commissioner of Insurance of the State of Wisconsin," explained credit analyst David Veno. The directive is for Ambac to establish a segregated account for certain insured exposure, primarily policies related to credit derivatives, residential mortgage-backed securities, and other structured finance transactions. It is our understanding that a plan for rehabilitation of the segregated account calls for cessation of claim payments on this exposure. It is our view that the regulatory directive with respect to the segregated account indicates a level of regulatory intervention at Ambac that is consistent with an 'R' rating. We believe that such a move will lead to concern that it favors one class of policyholders over another.
03.25.10


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A.M. Best Co. affirmed the financial strength rating (FSR) of B++ (Good) and upgraded the issuer credit rating (ICR) to "bbb+" from "bbb" of Fortegra Financial Corporation's property/casualty subsidiaries, Lyndon Southern Insurance Company. Wilmington, DE, and Insurance Company of the South (ICOTS), Athens, GA. Best also has affirmed the FSR of B++ (Good) and the ICR of "bbb" of the group's life/health subsidiaries, Life of the South Insurance Company, Athens, GA, Bankers Life of Louisiana, Marksville, LA, and Southern Financial Life Insurance Company, Scottsville, KY. The outlook for all ratings is stable. Fortegra Financial is a diversified financial services company that specializes in the administration, marketing and manufacturing of insurance products in the United States. Fortegra Financial has experienced good operating results in recent periods due to favorable earnings in its insurance subsidiaries and increasing fee income being generated by its non-insurance affiliates. However, the company maintains relatively high ratios of debt and intangible assets to equity. This is primarily due to the recent acquisition of Bliss & Glennon, Inc. (a property/casualty insurance agency) and the recapitalization that took place in 2007 when Summit Partners, Inc, a private equity and venture capital firm, acquired the company. A.M. Best notes that Fortegra Financial's unadjusted financial leverage is nearly 50%. However, the group's adjusted financial leverage, which incorporates significant equity credit for redeemable preferred stock and trust preferred securities, and projected interest coverage are both within the tolerances for its current ratings.
03.23.10

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A.M. Best Co. has revised the outlook to stable from negative and affirmed the issuer credit rating (ICR) of "a" of the non-operating holding company, Legal & General Group Plc (L&G), United Kingdom), as well as the ratings for all debt issued or guaranteed by L&G. At the same time, A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of A+ (Superior) and the ICR of "aa-" of Legal & General Assurance Society Limited (L&G ASL), United Kingdom. The change in outlook reflects A.M Best's view that L&G's current and prospective financial performance and risk-adjusted capital have improved, following a thawing in financial market conditions. The outlook also recognizes the strong inflows from its in-force book.
03.23.10

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Moody's upgraded the senior unsecured debt rating and the corporate family rating of Centene Corp. to Ba2 from Ba3. The insurance financial strength (IFS) ratings of its four rated subsidiaries have also been upgraded by one notch to Baa2 from Baa3. The outlook on Centene remains stable. Moody's stated that the upgrade reflects Centene's improved financial metrics: the aggregate NAIC consolidated risk-based capital (RBC) ratio of its operating companies improved to 174% of company action level (CAL), lower financial leverage (debt to capital of 35.8 % pro-forma at 12/31/2009, where debt includes operating leases and reflects the repayment of the amount outstanding under the revolving credit facility using the proceeds from the January 2010 equity offering), and improved diversification owing to a growing specialty business that accounted for approximately 22% of revenues and 28% of operating income in 2009. According to Steve Zaharuk, Moody's Senior Vice President, "The growth of Centene's specialty business, which includes behavioral health, long term care, pharmacy and vision benefits, provides diversity in the revenue and earnings stream outside the company's historical Medicaid base, as well as a good source of unregulated cash flow."
03.19.10

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A.M. Best Co. downgraded the financial strength rating to A- (Excellent) from A (Excellent) and issuer credit rating to "a-" from "a" of Kentucky Growers Insurance Company, Lexington, KY. The outlook for both ratings is stable. These rating actions reflect the company's decline in risk-adjusted capitalization over the past two years, which was driven by significant underwriting losses. Kentucky Growers' volatile underwriting results and generally weak operating returns are due primarily to its geographic concentration in Kentucky, which exposes it to frequent and severe weather-related events and competitive market conditions. Nonetheless, Kentucky Growers maintains an adequate risk-adjusted capital position due to its low underwriting leverage and conservative investment portfolio that historically has generated steady investment income.
03.18.10

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S&P lowered its counterparty credit and financial strength ratings on UNIFI Mutual Holding Co.'s insurance operating companies--Ameritas Life Insurance Corp., Acacia Life Insurance Co., First Ameritas Life Insurance Corp. of NY, and Union Central Life Insurance Co.--to 'A+' from 'AA-'. S&P also said that the outlook on these companies is stable. "The rating actions reflect our expectation that UNIFI's earnings stream will be more concentrated," explained credit analyst Jon Reichert. "In addition, we believe the company's competitive position has modestly weakened."
03.16.10

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A.M. Best Co. placed under review with developing implications and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-" of OM Financial Life Insurance Company, Baltimore, MD, and its wholly owned subsidiary, OM Financial Life Insurance Company of New York, Purchase, NY, (together known as OM Financial Life). OM Financial Life represents the U.S. life insurance and annuity operations of its ultimate parent, Old Mutual plc, a leading international long-term savings group based in South Africa and the United Kingdom. These rating actions follow the announcement by Old Mutual that it is looking for opportunities to streamline its portfolio of businesses, including a potential sale of OM Financial Life.
03.11.10

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A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B (Fair) and issuer credit rating to "bb-" from "bb+" of Atlanta Life Insurance Company, Atlanta, GA. These ratings have been placed under review with negative implications. Atlanta Life is the life insurance member of Atlanta Life Financial Group, Inc.
03.09.10

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A.M. Best Co. revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of American Strategic Insurance Group (ASI), St. Petersburg, FL, and its members. The ratings reflect ASI's continued underwriting profitability and solid risk-adjusted capitalization resulting from prudent underwriting, innovative pricing systems, effective reinsurance programs and a sound overall risk management focus. As a result, significant surplus growth has occurred in recent years, complemented by continued support from the parent company. The positive outlook contemplates that operating performance and risk-adjusted capitalization will continue to trend favorably in the near and long term, as ASI begins to further diversify its geographical footprint.
03.09.10

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A.M. Best Co. has placed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Sagicor General Insurance (Cayman) Ltd under review with negative implications. The rating actions follow the announcement that Sagicor Cayman's parent, Sagicor Life Jamaica Limited, has entered into a share purchase agreement with Bahamas First Holdings Limited (BFH) for the sale of Sagicor Cayman.
03.09.10

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A.M. Best Co. revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of the key U.S. life/health insurance subsidiaries of Unum Group, Chattanooga, TN. A.M. Best also revised the outlook to positive from stable and affirmed the ICR of "bbb-" and debt ratings of Unum. The revised outlook reflects Unum's continued improved capital position, solid operating results reported during a difficult economy and the group's very good investment performance last year. The ratings also reflect Unum's top ranked position as the leading disability income writer and the second-largest writer of voluntary business in the United States. Additionally, over the past few years, the company's conservative pricing and reserving practices have contributed to its improved overall profitability.
03.08.10

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A.M. Best Co. has placed the financial strength rating of A+ (Superior) and issuer credit ratings of "aa-" of Jackson National Life Insurance Company, its wholly owned subsidiary, Jackson National Life Insurance Company of New York and their direct parent, Brooke Life Insurance Company (collectively referred to as JNL) under review with negative implications. Concurrently, A.M. Best has placed the debt ratings of "a" on the existing $250 million 8.15% surplus notes and "aa-" on notes issued under funding agreement-backed securities programs of JNL under review with negative implications. All the above companies are headquartered in Lansing, MI. JNL represents the U.S. life insurance and annuity operations of its ultimate parent, Prudential plc (Prudential), an international financial services company based in the United Kingdom. Prudential is not affiliated with Prudential Financial, Inc., a global financial services company based in the United States. The rating actions are in response to Prudential's recent announcement that it has reached agreement with American International Group, Inc. (AIG) regarding terms for the combination of Prudential and AIA Group Limited (AIA), a wholly owned subsidiary of AIG. The transaction will be effected through the acquisition of both Prudential and AIA by a new company, which will assume the name Prudential plc. The transaction, which is expected to close in third quarter 2010, is subject to approval by Prudential shareholders, regulatory approvals and customary closing conditions. Given its size and complexity, A.M. Best believes the proposed transaction is subject to substantial execution and financing risks. Additionally, the strategic and financial importance of JNL to the new Prudential enterprise is yet to be determined. As a result, the ratings will remain under review pending the successful completion of the acquisition and A.M. Best's discussions with the management teams of both JNL and Prudential.
03.04.10

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Click For Insurance Networking News Ratings Updates
03.02.10

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A.M. Best Co. placed the financial strength rating of B (Fair), issuer credit ratings of "bb" and debt ratings of Security Benefit Life Insurance Company, Topeka, KS , and its subsidiary, First Security Benefit Life Insurance and Annuity Company of New York, Rye Brook, NY, under review with positive implications. Both companies are subsidiaries of Security Benefit Corporation. These rating actions follow the announcement of a definitive purchase agreement entered into between Security Benefit Corporation and Guggenheim Partners, LLC. Under this agreement, Guggenheim and a group of private investors will acquire Security Benefit Corporation and its subsidiaries. The transaction is expected to close in either late second or early third quarter 2010, with the Guggenheim-led group making an investment of approximately $400 million. In June 2009, Guggenheim became the investment advisor for Security Benefit Life's general account assets. As a result of the purchase transaction, Security Benefit Life will receive a substantial cash infusion immediately, which will improve its reported capital position and risk-adjusted capitalization. The balance of the remaining funds will follow upon the closing and after a demutualization process is completed. The ratings will remain under review pending the successful completion of the acquisition, demutualization and A.M. Best's discussions with management regarding the group's future operating projections, investment portfolio and capital structure.
02.19.10

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A.M. Best Co. revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a" of CNA Insurance Companies (CNA) and its members. Concurrently, A.M. Best has revised the outlook to stable from negative and affirmed the ICR of "bbb" and debt ratings of CNA Financial Corporation (CNAF), Delaware. A.M. Best also has revised the outlook to stable from negative and affirmed the FSR of A- (Excellent) and ICR of "a-" of CNAF's life/health subsidiary, Continental Assurance Company (CAC), Chicago, IL. The revised outlook primarily reflects the significant increase in the fair value of CNA's investments in 2009, which combined with solid operating income and other miscellaneous surplus credits, have resulted in an increase in the group's statutory surplus and substantially improved risk-adjusted capitalization that is more supportive of its ratings.
02.08.10

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Moody's lowered the credit ratings of The PMI Group, Inc. and its mortgage insurance subsidiaries as a result of continued deterioration in its capital position caused by prolonged weakness in the performance of its insured portfolio and constrained capital access. The insurance financial strength rating of the group's main mortgage insurance subsidiary, PMI Mortgage Insurance Company and of its affiliate PMI Insurance Co., was downgraded to B2, from Ba3. The rating of PMI Mortgage Insurance Company Limited, based in Europe, was downgraded to B3, from B1. Moody's has also lowered the senior unsecured debt ratings of the holding company, The PMI Group, Inc., to Caa2 from B3. The rating outlook is negative.
02.04.10

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Moody's downgraded to Ba3 from Ba2 the insurance financial strength (IFS) ratings of Mortgage Guaranty Insurance Corporation ("MGIC") and MGIC Indemnity Corporation. This rating action reflects continued deterioration in MGIC's capital position caused by prolonged weakness in the performance of its insurance portfolio, and more clarity about the group's contemplated restructuring. This action concludes the review of MGIC for possible downgrade and the review of MGIC Indemnity for possible upgrade which was initiated on July 17, 2009. Moody's also downgraded the senior debt ratings of the holding
company, MGIC Investment Corp, to Caa1 from B3. The outlook for the ratings is negative.
02.04.10

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S&P placed its ratings on MetLife Inc. and subsidiaries, including the 'A-' long-term counterparty credit rating on MetLife, on CreditWatch with negative implications. "The CreditWatch placement reflects MetLife's announcement that it is in discussions with AIG about acquiring one of AIG's subsidiaries, American Life Insurance Co. (ALICO). "We placed our ratings on MetLife on CreditWatch negative because of the sheer size of ALICO and to reflect our view that the potential acquisition could have a material adverse impact on MetLife's financial metrics, such as capitalization and fixed-charge coverage, as well integration risks," said Ms. Stoddard.
02.03.10

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S&P placed its 'BBB' counterparty credit ratings on Bermuda-based (re)insurance holding company White Mountains Insurance Group Ltd. (WTM) and its majority-owned insurance holding company, OneBeacon Insurance Group Ltd. (OB), on CreditWatch with negative implications. "The CreditWatch action follows OneBeacon's announcement that it intends to sell its personal lines operations to Tower Group Inc.," said S&P credit analyst Laline Carvalho.
02.03.10

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A.M. Best Co. placed the financial strength ratings of A (Excellent) and issuer credit ratings of "a" of Massachusetts Homeland Insurance Company (Mass Homeland), Canton, MA, and York Insurance Company of Maine, South Portland, ME, under review with negative implications. The rating actions reflect the recent announcement by OneBeacon Insurance Group, Ltd. that these two 100% reinsured subsidiaries are to be sold to Tower Group, Inc., New York, as part of a transaction to sell OneBeacon's personal lines business. As a result, the existing reinsurance agreements in place that cede 100% of Mass Homeland and York's businesses to OneBeacon Insurance Company are expected to be commuted at the close of the transaction in mid-2010, depending on regulatory approvals. Mass Homeland and York's ratings will remain under review pending the close of the transaction and regulatory approval of affiliated reinsurance agreements between the acquired companies and certain Tower subsidiaries. The transaction has no other impact on the ratings of OneBeacon or its 75% shareholder, White Mountains Insurance Group, Ltd.
02.02.10

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A.M. Best Co. commented that the ratings and under review with negative implications status of JEVCO Insurance Company, Montreal, Quebec, its parent, Kingsway Financial Services Inc., Mississauga, Ontario, and Kingsway's other operating insurance companies are unchanged. This follows Kingsway's announcement that it has entered into an agreement to sell JEVCO, its sole insurance operating company in Canada. The ratings of Kingsway, several U.S. subsidiaries and JEVCO were downgraded and kept under review with negative implications in November 2009. This was due to continued poor operating performance, a decline in business profile and uncertainty surrounding Kingsway's disposition of Lincoln General Insurance Company, York, PA. Although the successful sale of JEVCO would provide Kingsway with much needed financial flexibility, a ruling by the Pennsylvania court unwinding the disposition of Lincoln would continue to expose Kingsway to the financially distressed insurer. Additionally, the ratings for JEVCO are predicated on its affiliation with Kingsway and the execution risk involved in the transaction.
01.26.10

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A.M. Best Co. has upgraded the issuer credit rating to a+ from a and affirmed the financial strength rating of A (Excellent) of GCAN Insurance Company (GCAN), Toronto, Canada. The outlook for both ratings is stable. The rating actions reflect GCAN's excellent capitalization, solid underwriting and operating performance and consistently favorable reserve development. The company�s five-year average pre-tax returns on revenue and equity have been excellent. Capital appreciation has been solid, with additions for five consecutive years from a consistent stream of net investment income and favorable underwriting results. The ratings also reflect GCAN's ability to consistently outperform the industry composite from an operating perspective, due to its strict underwriting guidelines and conservative investment policy. These positive factors are somewhat offset by the company�s pursuit of growth and associated execution risk upon entering new commercial lines of business, its dependence on reinsurance and continued soft market conditions in Canada. In response, GCAN has reduced its reinsurance dependence by retaining more business and continuing to closely monitor appropriate retention levels and prudent underwriting guidelines. However, A.M. Best believes the company is well positioned to withstand existing soft market conditions based on management's historically conservative focus on profitability.
01.26.10

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A.M. Best Co. upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and the issuer credit ratings (ICR) to "a+" from "a-" of PARIS RE (France) and its affiliates. These ratings have been removed from under review with positive implications and assigned a positive outlook. Additionally, A.M. Best affirmed the ICR of "bbb-" of the holding company, PARIS RE Holdings Limited (PRH) (Switzerland) with a positive outlook. Subsequently, A.M. Best has withdrawn this rating and assigned an "nr". Concurrently, A.M. Best has withdrawn the FSR of A- (Excellent) and ICR of "a-" of CGRM (Compagnie Generale de Reassurance de Monte Carlo) (Monaco) and assigned an NR-5 to the FSR and an "nr" to the ICR, as this company was dissolved in 2009 as part of a corporate re-organization. These rating actions reflect the successful acquisition of PRH by PartnerRe Ltd. (Hamilton, Bermuda) (NYSE: PRE) and the benefits associated with being part of a well capitalized, more diversified group with a history of strong overall performance and a solid enterprise risk management framework. The ratings of PRH's operating companies reflect their solid risk-adjusted capitalization, diversified business profile and limited but supportive historical operating performance. These rating actions also reflect the planned integration of the PRH entities into the existing PRE operating structure enhancing the security afforded to PRH policyholders. The positive outlook recognizes the expected alignment of PRH policyholder interests to those of PRE, which carries an ICR of "aa-" at the operating company level. Should the expected integration of the PRE and PRH companies not proceed as outlined by management, the positive outlook will be re-evaluated and the ratings of the PRH operating entities may be modified. The withdrawal of PRH's ICR reflects its merger into an existing PartnerRe Ltd., Swiss acquisition company effective December 7, 2009.
01.22.10

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Moody's assigned a Baa2 rating to the 30-year senior unsecured debt issuance of Validus Holdings, Ltd. (NYSE: VR). The proposed issuance is expected to be between $250 million and $350 million, and the proceeds are expected to be used for general corporate purposes, which may include dividends to
shareholders or the repurchase of common stock under an existing $400 million share repurchase authorization. "This new debt issuance will tap into the additional borrowing capacity that Validus gained through its recent acquisition of IPC Holdings Ltd.," noted Kevin Lee, a senior credit officer at Moody's. As such, Validus' financial leverage, pro forma for the new issue and $400 million in potential share buybacks, will be roughly the same as what it was prior to the acquisition of IPC (roughly 16% debt-to-capital pro forma at 9/30/2009).
01.21.10

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A.M. Best Co. upgraded the issuer credit rating to "bbb+" from "bbb" and affirmed the financial strength rating of B++ (Good) of PacWest Captive Insurance Company, Inc. (PacWest), Scottsdale, AZ. The outlook for both ratings has been revised to positive from stable. These rating actions reflect PacWest's excellent capitalization, strong profitability and the continued financial support it receives in the form of ongoing capital contributions by participating agencies (shareholders) of Leavitt Group. PacWest's favorable operating performance is derived from its strict underwriting guidelines, conservative investment policy and successful business model. These positive factors are somewhat offset by the company's aggressive growth in both premium volume and associated liabilities in recent years, as well as its business concentration risk, operating as a monoline workers' compensation insurer with the majority of its premium volume coming from the state of California. In an effort to limit its concentration risk, PacWest's management is focused on growing its book of business outside of California in states where Leavitt Group agencies are located.
01.13.10

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S&P lowered its counterparty credit rating on Delphi Financial Group Inc. (DFG) to 'BBB' from 'BBB+'. The agency also said that it assigned its 'BBB' rating to DFG's proposed $250 million senior unsecured fixed-rate notes. The outlook is negative. "We lowered the counterparty credit rating on DFG because we expect that the company's proposed $250 million debt issue will increase its interest expense by about $15.3 million," explained credit analyst Ferris Joanis. This will likely lower its GAAP and statutory fixed-charge coverage ratios to below what we consider supportive of a nonstandard two-notch differential between the counterparty credit rating on the holding company and the financial strength rating on the operating company. "Today's downgrade reflects a shift to our standard three-notch differential between the holding-company and operating-company ratings," Joanis added. The counterparty credit rating on DFG in part reflects its consistently strong and diversified sources of revenue arising from the operating performance of its complementary life (RSL) and property/casualty (Safety National) insurance subsidiaries. We expect that the company will use the proceeds from the debt issue to retire $222 million of its outstanding bank debt. The negative outlook reflects the capital deficiency at RSL at the 'A' level as measured by Standard & Poor's capital model and its overall negative impact on the group's consolidated capital. The consistently strong operating earnings DFG derives from its life and property/casualty operations should support GAAP and statutory fixed-charge coverage for the company that is appropriate for its rating and risk profile. We could lower the rating again if the capital deficiency at RSL continues to increase and hurt the group's consolidated capital. We could revise the outlook to stable if capital adequacy improves and the group continues to maintain its strong competitive position and operating performance.
01.13.10

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Moody's affirmed the ratings of John Hancock Life Insurance Company USA (JHUSA, Aa3 insurance financial strength (IFS) rating) and its affiliates in response to the planned reorganization of legal entities within Manulife Financial Corporation's (TSX: MFC, unrated) U.S. operations, which will occur on December 31, 2009. As a result of the anticipated reorganization, Moody's also affirmed and will withdraw the ratings of several other MFC U.S. subsidiaries. The rating outlooks on all of MFC's subsidiaries are stable. The reorganization of the legal structure of MFC's U.S. operations simplifies the management of its U.S. business and marks the final phase in the integration of the legacy Manulife and John Hancock U.S. companies. Senior Credit Officer Arthur Fliegelman commented: "While Moody's believes that the completion of this reorganization streamlines MFC's operations, it has no rating implications since Moody's had already evaluated these operations as an integrated entity." As part of the reorganization process, two life insurance subsidiaries--John Hancock Life Insurance Company (JHLICo) and John Hancock Variable Life Insurance Company (JHVLICo)--will be merged into JHUSA effective December 31, 2009, and cease to exist, with JHUSA becoming the lead U.S. life insurer for MFC. The Aa3 IFS ratings of JHLICo and JHVLICo were affirmed and will be withdrawn upon completion of the merger. The insurance liabilities and other obligations of these two entities will then be assumed by JHUSA. Moody's has also affirmed the A3 rating on two debt obligations of John Hancock Financial Services, Inc. (JHFS) - C$220 million of 6.822% Senior Unsecured Notes due May 31, 2011, and C$175 million of 6.646% Senior Unsecured Notes due November 30, 2011. As part of the reorganization, JHFS's assets and liabilities will be assumed by The Manufacturers Investment Corporation (MIC, unrated).MIC will enter into supplemental indentures to provide for the assumption by MIC of the obligations in respect of these two notes. MFC will continue to fully and unconditionally guarantee these notes with the guarantee ranking pari passu with MFC's senior financial obligations. The A3 debt rating on these notes reflects the business and financial profile of the U.S. insurance operations owned by MIC (e.g. JHUSA), as well as the guarantee provided by MFC.
12.29.09


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A.M. Best Co. affirmed the issuer credit rating (ICR) of "bbb" of Delphi Financial Group, Inc., Wilmington, DE, [NYSE:DFG]. A.M. Best also has affirmed the financial strength rating (FSR) of A (Excellent) and ICRs of "a" of Delphi Financial's primary life insurance subsidiaries, Reliance Standard Life Insurance Company (Reliance Standard) (Chicago, IL) and First Reliance Standard Life Insurance Company (New York, NY). Concurrently, A.M. Best has affirmed all debt ratings of Delphi Financial and Reliance Standard Life Global Funding (Illinois). The outlook of all ratings remains negative. A.M. Best continues to maintain a negative outlook on Delphi Financial and its life insurance subsidiaries due to their above average level of investment risk and subpar investment performance. Delphi's investment philosophy has historically been more aggressive than many of its peer companies. Reliance Standard currently holds a sizeable portion of its invested assets in structured securities, including non-agency residential mortgage-backed securities, which have experienced considerable rating downgrades over the past twelve months. Additionally, through the first nine months of 2009, Reliance Standard reported large realized capital losses tied to the company's fixed income portfolio. However, A.M. Best notes, like the rest of the life/health industry, its unrealized loss position has significantly improved since March 31, 2009. Reliance Standard continues to report consistent operating results and has an established presence in the small to mid-sized employee benefit market, where it focuses primarily on group disability income and group life product offerings. The company has reported moderate premium growth and favorable persistency in its book of business, despite the weak economy. Thus far, there has been no evidence of an economic impact regarding claims incidence reported, and loss ratios remain stable. However, aggressive pricing continues to be observed within the employee benefits market, which has potential to further pressure the company's sales going forward. Reliance Standard gains additional diversification through its growing asset accumulation business as well as its portfolio of voluntary offerings and its limited benefit medical offering. Delphi Financial continues to maintain an appropriate level of capital to support its current insurance risk. Debt-to-capital position remains at an acceptable level at 23.5% as of September 30, 2009. Delphi Financial raised capital earlier this year through two separate common equity offerings totaling $121 million and several capital contributions to Reliance Standard to bolster its capital position, which more than offset the large amount of realized capital losses. A.M. Best also expects that the forthcoming NAIC/ PIMCO ratings "remigration" of the company's non-agency residential mortgage-backed securities will also add positively to its year-end risk-adjusted capital position.
12.22.09

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A.M. Best Co. revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICRs) of "a" of Safety National Group, the group of property/casualty subsidiaries of Delphi Financial Group, Inc., Wilmington, DE, [NYSE:DFG]. The ratings apply to Safety National Casualty Corporation (SNCC), St. Louis, MO and its reinsured affiliate, Safety First Insurance Company (SFIC) (Chicago, IL), which operate as Safety National Group. The revised outlook reflects Safety National's solid profitability levels, which continue to outperform the peer composite, and A.M. Best's expectation for additional surplus growth achieved through strong earnings over the near term. The affirmations reflect the group's strong operating performance, solid capitalization achieved in part through explicit capital support from its parent, Delphi Financial, and its established market presence within the excess workers' compensation market. Partially offsetting these positive factors are the areas of ongoing, yet declining, adverse development occurring on prior accident years, the earnings drag associated with these years, and the impact of investment market fluctuations in recent years, which has constrained the group's ability to internally generate capital.
12.22.09

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S&P raised its counterparty credit rating on Platinum Underwriting Holdings Ltd. to BBB+ from BBB. S&P also assigned 'A' counterparty credit and financial strength ratings to Platinum's insurance subsidiaries: Platinum Underwriters Reinsurance Inc. and Platinum Underwriters Bermuda Ltd. The outlook on all of these entities is stable. "The upgrade on the holding-company credit rating primarily reflects our opinion of Platinum's very strong cycle management," noted credit analyst Tracy Dolin. "Strong enterprise risk management and the company's highly skilled and experienced underwriting and actuarial staff should help sustain its track record of strong earnings and capitalization." The company's strategy of shifting its diversified product mix opportunistically based on rate adequacy should help somewhat mitigate its exposure to pricing pressures because of its focus on large accounts. Partially offsetting these strengths is Platinum's somewhat high concentration of business in terms of geographic spread and distribution. In addition, given that a significant proportion of Platinum's reserves are for its casualty lines, the company is susceptible to small-to-moderate reserve-strengthening needs (although we expect nothing sizeable in the near term) if prior-year adverse development, unfavorable loss trends, or inflationary concerns were to arise. The outlook is stable. We believe Platinum will continue to maintain its underwriting discipline in the face of competitive market conditions. Accordingly, we anticipate that its premiums will decline by low double digits as property/casualty insurance rates soften, a product of cedants' increased capacity. In addition, reinsurance demand should remain flat, yet insurable exposures will continue to decline in tandem with adverse economic conditions. Lastly, U.S. casualty rates remain inadequate relative to loss-cost trends. We expect that Platinum's business profile will remain at about a 60%/40% split between property and casualty through the remainder of 2009 and into 2010. The company will likely continue to de-emphasize its finite-risk segment until there is clarification regarding regulatory and accounting rules. We believe Platinum's profile will remain small and volatile given the company's focus on large accounts and its reinsurance-only platform. Platinum's operating performance should remain strong for the remainder of 2009 and 2010, assuming normal catastrophe levels during this period. For 2010, we expect that its operating performance will deteriorate somewhat as the company maintains its underwriting discipline through the softening rate cycle. We expect that Platinum's capitalization will remain very strong, supported by strong earnings. Platinum will likely manage capital efficiently, chiefly to take advantage of profitable underwriting opportunities. Otherwise, the company probably will revert to repurchasing shares. "A downgrade is unlikely because of Platinum's very strong cycle management, strong ERM, and strong capital base," Ms. Dolin said. "Additional favorable rating actions are also unlikely because of the company's static competitive position relative to peers."
12.18.09

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S&P raised its long-term counterparty credit and insurer financial strength ratings on the following core subsidiaries of Bermuda-based Catlin Group Ltd. to 'A' from 'A-':

� Bermuda-based Catlin Insurance Co. Ltd.
� U.S.-based Catlin Specialty Insurance Co.
� U.S.-based Catlin Insurance Co. Inc.
� U.K.-based Catlin Insurance Co. (U.K.) Ltd.

The outlook on all entities is stable. At the same time, we raised our long-term subordinated debt rating on the preferred shares issued by Catlin Insurance Co. Ltd. to 'BBB+' from 'BBB'. We also raised the Lloyd's Syndicate Assessment (LSA) on the core, wholly owned Catlin Underwriting Agencies - Syndicate 2003 to '4' from '4-'. The outlook is also stable. "The upgrades primarily reflect our opinion of the group's improved financial profile," said S&P credit analyst Matthew Day. "We believe that the company's capital position has improved, and will prove resilient to the growth expectations of the group," he added. We also expect the planned derisking of the investments to benefit the group's capital position and reduce the potential level of earnings volatility prospectively. The ratings and LSA also reflect Catlin's strong competitive position, strong operating performance, strong capitalization, and strong enterprise risk management (ERM). These strengths are offset, however, by the inherent challenge of maintaining growth momentum. The stable outlook reflects S&P's expectation that Catlin's management team will maintain the current strategy. We expect capital adequacy to be maintained at least at the strong level, primarily through Catlin's retained earnings. Having attained its current scale and market profile in the London market, there is a risk that Catlin may find it difficult to retrench as quickly or as far as might be warranted by market conditions in certain lines of business, but it has a track record of good cycle management. S&P expects the group operating performance to be strong, with a combined ratio below 95% in 2009 and 2010, and a return on revenue of greater than 12%. A rating downgrade is unlikely, due to the increasingly robust capital base, the strong ERM, and the focus on controlling the asset and liability exposure. Future upward rating actions are unlikely at this point in the group's evolution, due to the execution risks associated with the growth of international operations.
12.14.09

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S&P lowered its counterparty credit rating on Assurant Inc. (NYSE:AIZ) to 'BBB' from 'BBB+'. At the same time, the agency lowered its counterparty credit and financial strength ratings on Time Insurance Co. and John Alden Life Insurance Co. (collectively referred to as Assurant Health) to 'BBB+' from 'A-'. In addition, we affirmed our 'A-' counterparty credit and financial strength ratings on all of Assurant's strategically important subsidiaries. The outlook on all of these entities is negative. "The downgrade of Assurant Inc. stems from the company's lower earnings diversification," said Standard & Poor's credit analyst Taoufik Gharib. Up until 2008, we viewed the consolidated group as stronger than the sum of its individual business units (Assurant Solutions, Assurant Specialty Property, Assurant Health, and Assurant Employee Benefits), reflecting the diverse sources of operating income that appeared to have limited covariance in exposure to various economic influences and business cycles. However, the current recession has hampered Assurant's results and weakened earnings diversity. In the first nine months of 2009, Assurant's consolidated results remained strong, with pretax operating income of $670 million (including legal settlement and related expenses of $84 million) and a return on revenue (ROR) of 10.2%, compared with $727 million and 10.8% in the same period in 2008. However, the significant majority of these earnings stemmed from Assurant Specialty Property, with contributions from Assurant Health and Assurant Employee Benefits steadily declining over the years. Standard & Poor's 'BBB' counterparty credit rating on Assurant is two notches below the 'A-' financial strength ratings on Assurant's strategically important subsidiaries. This narrow notching (versus the standard three-notch differential) reflects the holding company's modest financial leverage and very strong coverage metrics. As of Sept. 30, 2009, debt-plus-preferred leverage was 16.7% and fixed-charge coverage was 15.7x. Furthermore, the holding company held $456 million of marketable securities with the intent to maintain at least $250 million, which further enhances the group's financial flexibility. "The downgrade of Assurant Health is primarily a result of significantly weakened operating performance in 2009," said Gharib. "As a result of higher utilization, pretax operating income, excluding one-time items, decreased to $11 million in the first three quarters of 2009 from $147 million in the same period in the previous year." The ROR decreased to 0.7% from 9.5%. Price increases and plan design changes have been implemented for new business and renewals, along with expense-savings initiatives. But, because of the continued high level of utilization and the time it takes for price increases to make it through the renewal book, we no longer expect operating performance for the remainder of this year and for 2010 to improve to the level we had expected when we lowered our ratings on Assurant Health to 'A-' from 'A' in July 2009.
12.10.09

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S&P raised its long-term counterparty credit and insurer financial strength ratings on the core and guaranteed operating subsidiaries of the Switzerland-based reinsurance group PARIS RE Group (PARIS RE), including PARIS RE S.A. and PARIS RE Switzerland Ltd., to 'A+' from 'A-'. S&P also removed the ratings from CreditWatch with positive implications where they were placed July 6, 2009. The outlook is positive. The upgrade follows the acquisition and control by PartnerRe Ltd. (PRE; A/Negative/--) of more than 90% of the voting rights in PARIS RE. This level of control enables PRE to effect a merger of PARIS RE Holdings Ltd., the listed parent company of the group, into PartnerRe Holdings II Switzerland GmbH, a direct wholly-owned subsidiary of PRE. Having obtained legal and Board level control of PARIS RE and following the completion of the legal merger, which we expect before year-end, we understand that beginning in 2010, and subject to regulatory approval, PRE is over time likely to integrate the rated PARIS RE entities into the existing core subsidiaries and/or branch operations of the PRE group. S&P has raised the ratings on PARIS RE's operating companies to within one notch of the ratings on PRE's core operating subsidiaries (AA-/Negative/--). This is because of PRE's ownership stake and its intention to acquire the remaining shares in PARIS RE, management's intent to directly align the interests of PARIS RE's policyholders with those of PRE prospectively, and the strategic benefit that PARIS RE provides to its new owner by virtue of its complementary global reinsurance franchise. The one-notch differential is consistent with our group rating methodology. "The ratings on PARIS RE are based on its track record of successful strategic execution, its strong competitive position, and strong financial profile," said credit analyst Mark Coleman. PARIS RE's financial profile includes its strong capitalization, albeit weakened by the previously disclosed $310 million special cash dividend under the terms of the acquisition, strong asset quality, and limited exposure to reserving issues. PARIS RE has a short tailed liability profile and an adverse development guarantee provided by COLISSE RE (formerly AXA RE; not rated) with respect to the net reserves carried forward at Jan. 1, 2006. The ratings are constrained by PARIS RE's earnings profile, which, although strong, is volatile due to catastrophe risk and has a higher relative exposure to credit and surety reinsurance than most of its sector peers amid a recessionary economic climate.
12.04.09

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Moody's placed the A2 insurance financial strength ratings of the OneBeacon Insurance Group inter-company pool members (OneBeacon ) and the Baa2 senior debt rating of its intermediate holding company, OneBeacon U.S. Holdings, Inc. (OneBeacon U.S.), under review for possible downgrade. The rating action follows the company's announcement that it has sold --via a renewal rights agreement--its non-specialty commercial lines business (totaling $490 million of direct premiums) to The Hanover Insurance Group. The transaction represents a strategic shift in OneBeacon's business profile towards that of a specialty insurance company, with nearly two-thirds of pro-forma premium volume derived from specialty lines and the balance in personal lines. Moody's Senior Credit Officer Pano Karambelas said: "The review for downgrade will focus on the company's shifting business profile and its competitive position relative to other specialty lines writers, as well as its prospective profitability and future capital structure." The rating agency's review will also consider possible changes to the company's catastrophe exposure, reinsurance programs, and reserve position. Moody's commented that should a downgrade occur, it is not expected to be more than one notch. OneBeacon's past business profile featured a balanced mix of specialty, commercial, and personal lines portfolios which--over the long-term--was expected to provide an earnings stream with potential diversification benefits. "As a focused specialty writer," Karambelas added, "OneBeacon will face direct competition with a number of larger, well-entrenched commercial specialty writers with strong financial performanc
 

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