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Insurance ratings actions: S&P affirms Markel, subsidiaries

S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5 p.m. ET. Actions after 5 p.m. ET will be included in the following day's roundup.

U.S. and Canada

A.M. Best upgraded the long-term issuer credit rating to "b+" from "b" and affirmed the financial strength rating of C++ (Marginal) of Bedford Park, Ill.-domiciled First Chicago Insurance Co.

The outlook of the financial strength rating was revised to positive from stable, while the long-term issuer credit rating remains positive.

Concurrently, A.M. Best upgraded the financial strength rating to C (Weak) from C- (Weak) and the long-term issuer credit rating to "ccc" from "cc" of United Security Health and Casualty Co., a wholly owned subsidiary of First Chicago.

The outlook for the long-term issuer credit rating was revised to positive from stable, while the outlook for the financial strength rating remains stable.

The ratings of First Chicago reflect its weak balance sheet, adequate operating performance, limited business profile and marginal enterprise risk management.

The upgrades reflect First Chicago's improved operating performance, based on the consolidated financial results of the two companies, which resulted in favorable pretax operating gains, positive net income and surplus increases for five consecutive years.

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A.M. Best placed under review with negative implications the long-term issuer credit ratings of "bbb-" of Bermuda-based Maiden Holdings Ltd. and its intermediate subsidiary, Maiden Holdings North America Ltd.

The agency also placed the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of "a-" of Maiden Reinsurance Ltd. and its affiliate, Maiden Reinsurance North America Inc. under review with negative implications.

The negative implications reflect the potential impact that the sale of the U.S. diversified business will have on the group's on-going business profile.

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Fitch Ratings affirmed Des Moines, Iowa-based Principal Financial Group Inc.'s long-term issuer default rating at A and the AA- (Very Strong) insurer financial strength ratings of its U.S. operating subsidiaries Principal Life Insurance Co. and Principal National Life Insurance Co.

The agency also affirmed the long-term issuer default rating at A of Principal Financial Services Inc. The ratings outlook is stable.

The agency pointed to Principal Financial's very strong and stable operating profitability and very strong business profile, which reflects the company's strong market position and significant operating scale focusing on small and midsize businesses in the retirement market.

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Moody's affirmed the A2 insurance financial strength ratings of Glen Allen, Va.-based Markel Corp.'s property and casualty insurance subsidiaries.

The subsidiaries are Evanston Insurance Co., Markel Insurance Co., Markel American Insurance Co., Essentia Insurance Co. and Markel Bermuda Ltd. The agency also affirmed the Baa2 long-term issuer rating of Alterra Capital Holdings Ltd.

The outlook for the ratings is stable. The actions followed the announcement that Markel is acquiring Bermuda-based Nephila Capital Ltd.

Moody's said the proposed acquisition brings strategic benefits to Markel, including expanding its capabilities in the fast-growing insurance-linked securities market, broader distribution and investor relationships and incremental fee-based revenues.

S&P Global Ratings affirmed its BBB long-term issuer credit rating on Markel and its A long-term financial strength and issuer credit ratings on the company's core operating subsidiaries with a stable outlook.

The agency expects Markel to continue reporting strong operating performance while further enhancing its operating platform with a focus on risk diversification, which will sustain its strong competitive position, and maintain very strong capitalization despite the potential for ongoing acquisitions.

Middle East and Africa

S&P withdrew the ratings on The Mediterranean & Gulf Insurance & Reinsurance Co. B.S.C (c) at the company's request.

The agency had placed its BBB- long-term issuer credit and insurer financial strength ratings and its gcAA- regional scale ratings on the company on CreditWatch with negative implications.

S&P sees considerable uncertainty regarding the impact on the company's business and financial risk of the decision to deconsolidate Saudi Arabia-based Mediterranean and Gulf Cooperative Insurance and Reinsurance Co.

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S&P affirmed its BB+ long-term counterparty credit and insurer financial strength ratings on AIG South Africa Ltd. and AIG Life South Africa Ltd.

The stable outlook continues to mirror that on the long-term local currency rating on South Africa.

S&P also affirmed its zaAAA national scale rating on both entities.

The affirmation primarily reflects the sound capital position, liquid investment portfolio and comprehensive group reinsurance cover of the entities.

Asia-Pacific

A.M. Best affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of "a+" of Japan-based Toa Reinsurance Co. Ltd. and Toa Reinsurance Co. of America.

The agency also assigned a financial strength rating of A (Excellent) and a long-term issuer credit rating of "a+" to Toa 21st Century Reinsurance Co. Ltd.

The outlook of these ratings is stable.

The ratings of Toa Re reflect the company's consolidated balance sheet categorized as strongest, adequate operating performance, neutral business profile and appropriate enterprise risk management.

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S&P affirmed its A long-term local currency insurer financial strength and issuer credit ratings on China Pacific Property Insurance Co. Ltd. with a negative outlook.

The agency expects the company to remain a core entity of China Pacific Insurance (Group) Co. Ltd. over the next two years.

The negative outlook on the company reflects S&P's expectation of continued pressure on the group's capitalization over the next two years.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this feature can be found here, here, here and here.

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