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Insurance ratings actions: DBRS confirms Fairfax Financial

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Insurance ratings actions: DBRS confirms Fairfax Financial

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 placed under review with negative implications the financial strength rating of A- and the long-term issuer credit ratings of "a-" of California Capital Insurance Co. and its subsidiaries: Eagle West Insurance Co., Monterey Insurance Co. and Nevada Capital Insurance Co.

These companies operate under an intercompany pooling arrangement. The rating actions follow management's discussion with A.M. Best regarding the potential losses related to the Camp and Woolsey wildfires in California in November. Based upon current estimates, gross ultimate losses will far exceed losses previously contemplated in the group's ratings.

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A.M. Best affirmed the financial strength rating of A++ and the long-term issuer credit ratings of "aa+" of the property and casualty members of Houston Casualty Group.

The members are Houston Casualty Co., Avemco Insurance Co., U.S. Specialty Insurance Co., HCC Reinsurance Co. Ltd., HCC Specialty Insurance Co., American Contractors Indemnity Co., United States Surety Co., Producers Agriculture Insurance Co. and Producers Lloyds Insurance Co.

A.M. Best also affirmed the financial strength rating of A++ and the long-term issuer credit rating of "aa+" of HCC Life Insurance Co. The outlook of these ratings is stable.

The ratings of the P&C members of the group reflect their consolidated balance sheet strength, which A.M. Best categorizes as strongest, as well as their very strong operating performance, favorable business profile and very strong enterprise risk management of the consolidated operations.

Additionally, A.M. Best affirmed the financial strength rating of A++ and the long-term issuer credit ratings of "aa+" of Philadelphia Indemnity Insurance Co. and its affiliate, Tokio Marine Specialty Insurance Co., which operate under a pooling agreement.

The outlook of these ratings is stable.

The ratings reflect the companies' balance sheet strength, which A.M. Best categorizes as strongest, as well as their very strong operating performance, favorable business profile and very strong enterprise risk management.

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A.M. Best affirmed the financial strength rating of A+ and the long-term issuer credit ratings of "aa" of First Insurance Co. of Hawaii Ltd. and its reinsured subsidiaries.

The subsidiaries are First Fire and Casualty Insurance of Hawaii Inc., First Indemnity Insurance of Hawaii Inc. and First Security Insurance of Hawaii Inc. The outlook of these ratings is stable.

The ratings reflect the group's very strong balance sheet, strong operating performance, neutral business profile and very strong enterprise risk management.

The capacity of the balance sheet is supported by retained earnings, conservative reserve positions and favorable levels of liquidity. Profitable underwriting performance over an extended period in a dynamic market is complemented with strong investment returns.

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DBRS confirmed the BBB (high) issuer rating of Canada-based Fairfax Financial Holdings Ltd.

Also, the agency confirmed the issuer rating and the financial strength rating of Northbridge General Insurance Corp., as well as the financial strength rating of Federated Insurance Co. of Canada at A. All trends are stable.

DBRS noted Fairfax Financial's global footprint in property and casualty insurance and reinsurance, as well as its good franchise strength supported by its international network of subsidiaries that successfully compete in niche markets.

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Kroll Bond Rating Agency assigned an insurance financial strength rating of BBB- with a stable outlook to Lake Bluff, Ill.-based ELCO Mutual Life and Annuity

The agency took stock of ELCO's consistent strong top-line growth and stable operating income, which is largely being generated by its flagship product, a Medicaid-compliant annuity.

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Kroll Bond Rating Agency assigned an A- insurance financial strength rating to Puerto Rico-based Converge RE II, and a BBB- issuer rating to Converge Holdings Inc.

The outlook is stable. The ratings were based on Converge RE's sound initial capitalization, the life and annuity business assumed to date, experienced management team and strong asset/liability management framework to ensure sufficient liquidity to cover projected cashflows.

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Kroll Bond Rating Agency affirmed the AA+ insurance financial strength rating of New York-based Assured Guaranty Municipal Corp. and assigned an AA+ insurance financial strength rating to Assured Guaranty (Europe) PLC.

The outlooks are stable. Kroll said Assured Guaranty's rating was due to its substantial claims paying resources, skilled management team and ability to withstand the agency's stress scenario losses as applied across the company's insured portfolio.

The agency also said that Assured Guaranty (Europe)'s financial position is strong due to a combination of intragroup reinsurance and support arrangements.

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Moody's affirmed the A1 insurance financial strength ratings of Cincinnati Insurance Co., Cincinnati Casualty Co. and Cincinnati Indemnity Co., which are subsidiaries of Cincinnati Financial Corp.

The outlooks were revised to positive from stable because of the group's strong financial profile.

Moody's said Cincinnati Financial enjoys a long-standing regional and increasingly national franchise, which benefits from strong relationships with independent agents, its focus on small and middle market commercial lines risks and its robust capital adequacy.

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Moody's affirmed with stable outlooks the Baa1 insurance financial strength ratings of Pennsylvania National Mutual Casualty Insurance Co. and Penn National Security Insurance Co.

Penn National is an established regional carrier with a high quality investment portfolio and conservative financial leverage, the agency said.

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S&P Global Ratings assigned A long-term issuer credit and insurer financial strength ratings to Safety First Insurance Co.

The positive outlook mirrors that on the ultimate parent, Tokio Marine.

Europe

A.M. Best assigned a financial strength rating of A- and a long-term issuer credit rating of "a-" to Fortegra Europe Insurance Co. Ltd.

The outlook assigned to these ratings is stable.

The ratings reflect the company's strong balance sheet, adequate operating performance, limited business profile and appropriate enterprise risk management. The company's ratings benefit from the support of its parent, Fortegra Financial Corp.

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S&P assigned its B- long-term issuer credit rating to Acropole Holding, an intermediate holding company of France-based Siaci Saint Honore, and to Acropole Holding's financing subsidiary, Sisaho International SAS.

The outlook on both entities is stable.

The action follows the acquisition of Siaci Saint Honore by the existing management team and private equity firm Charterhouse, S&P said.

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S&P affirmed its A- long-term issuer credit ratings on France-based life insurer Groupe Prevoir's core operating entities, Prevoir Vie and Prevoir Risques Divers.

The agency also affirmed the BBB issuer credit rating on the group's nonoperating holding company, Société Centrale Prévoir. The outlooks on all the long-term ratings are stable.

S&P said Societe Centrale Prevoir's acquisition of Assur One Group will not affect its creditworthiness, primarily because Prévoir's consolidated capital adequacy includes a significant amount of assets at the holding company.

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S&P affirmed the A long-term issuer credit and financial strength ratings on the core operating entities of Austria-based UNIQA and affirmed the A- long-term issuer credit and financial strength ratings on the group's holding company and highly strategic subsidiary.

The outlook remains stable. S&P said UNIQA's capital adequacy has gradually consolidated at "extremely strong" levels over the recent years due to the group's ongoing derisking of its balance sheet, increased focus on underwriting performance and stringent capital management.

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S&P affirmed with a stable outlook the A- issuer credit and financial strength ratings on Finland-based Försäkringsaktiebolaget Alandia.

The agency said Alandia enjoys a robust capital buffer that displays a substantial margin above the AAA level. Although S&P expects the buffer to decrease due to growth, it anticipates the margin to remain ample over the next two to three years.

Middle East and Africa

S&P affirmed with a negative outlook the BB+ long-term insurer financial strength and issuer credit ratings on United Arab Emirates-based Al Buhaira National Insurance Co.

The ratings were removed from CreditWatch with negative implications, where they were originally placed on March 29.

S&P said there is a possibility of the company's future financial performance falling short of the business plan submitted to the regulator or the regulator rejecting the business plan completely and taking severe regulatory action against the company.

But the agency noted that there is a lower chance that it will lower the ratings over the coming three months, although a negative rating action is still possible over the coming 12 months, as reflected by the negative outlook.

Asia-Pacific

S&P downgraded the financial strength and issuer credit ratings on OnePath Life (NZ) Ltd. to A from A+, and removed the ratings from CreditWatch with negative implications.

The outlook is negative. The rating action came after the downgrade of the company's U.S.-based parent, Cigna Corp.

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S&P revised its outlooks to positive from stable on the financial strength and long-term issuer credit ratings on Japan-based MassMutual Life Insurance Co. and affirmed the A- ratings on the company.

The agency said there is at least a 33% chance that the stand-alone credit profile of the company would improve to prompt an upgrade within the next one or 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, here, here, here, here and here.

Links are current as of publication time; S&P Global Market Intelligence is not responsible if those links are unavailable later.