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Insurance ratings actions, June 6

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Insurance ratings actions, June 6

S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5:30 p.m. ET. Actions after 5:30 p.m. ET will be included in the following day's roundup.

Financial guaranty

S&P Global Ratings placed certain ratings of MBIA Inc., Build America Mutual Assurance Co. and National Public Finance Guarantee Corp. on CreditWatch negative pending a review of the companies' competitive positions.

The rating agency placed the negative CreditWatch on Build America Mutual Assurance's AA financial strength rating, MBIA's A- long-term counterparty credit rating and National Public Finance Guarantee's AA- financial strength rating.

Build America Mutual Assurance's rating was placed on negative CreditWatch due to its share of industry insured par and premiums written, along with its risk-based pricing, which may not support the current AA financial strength rating. The company, which has been able to increase its business volume year over year, may be limited competitively by its underwriting strategy geared toward the U.S. public finance market, the rating agency said.

National Public Finance Guarantee's ratings were placed on CreditWatch negative due in part to its struggle to gain wide market acceptance, its exposure to volatility, and the macroeconomics of a single market, the rating agency said.

The decision to place MBIA's rating on negative CreditWatch was a reflection of the company's structural subordination to National Public Finance Guarantee.

Property and casualty

Demotech upgraded the financial stability rating assigned to First Mutual Insurance Co. to A' (A Prime), Unsurpassed.

The rating agency said this level of financial stability rating is assigned to insurers that possess unsurpassed financial stability related to maintaining positive surplus as regards policyholders, liquidity of invested assets, an acceptable level of financial leverage, reasonable loss and loss adjustment expense reserves and realistic pricing.

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A.M. Best affirmed the financial strength ratings of A- and the long-term issuer credit ratings of "a-" of State Automobile Mutual Insurance Co. and its operating subsidiaries, State Auto Property & Casualty Insurance Co., Milbank Insurance Co., State Auto Insurance Co. of Ohio, Patrons Mutual Insurance Co. of Connecticut, Meridian Security Insurance Co., State Auto Insurance Co. of Wisconsin, Rockhill Insurance Co., Plaza Insurance Co., American Compensation Insurance Co. and Bloomington Compensation Insurance Co.

The rating agency also affirmed the long-term issuer credit rating of "bbb-" of State Automobile Mutual Insurance's intermediate holding company, State Auto Financial Corp.

The outlook is stable.

The ratings reflect State Automobile Mutual Insurance's strong risk-adjusted capitalization, long-standing regional market presence, well-established agency relationships, solid brand name recognition and diversified product offerings. The ratings also reflect the financial flexibility and access to capital through State Auto Financial, A.M. Best said.

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Fitch Ratings affirmed Progressive Corp.'s issuer default rating at A+ and senior debt ratings at A.

Fitch also affirmed the insurer financial strength ratings at AA of the company's operating units.

The units are Progressive Direct Holdings members Mountain Laurel Assurance Co., Progressive Advanced Insurance Co., Progressive Choice Insurance Co., Progressive Direct Insurance Co., Progressive Freedom Insurance Co., Progressive Garden State Insurance Co., Progressive Marathon Insurance Co., Progressive Max Insurance Co., Progressive Paloverde Insurance Co., Progressive Premier Insurance Co. of Illinois, Progressive Select Insurance Co., Progressive Universal Insurance Co.; Progressive Agency Holdings members Drive New Jersey Insurance Co., Progressive American Insurance Co., Progressive Bayside Insurance Co., Progressive Casualty Insurance Co., Progressive Classic Insurance Co., Progressive County Mutual Insurance Co., Progressive Gulf Insurance Co., Progressive Hawaii Insurance Corp., Progressive Michigan Insurance Co., Progressive Mountain Insurance Co., Progressive Northern Insurance Co., Progressive Northwestern Insurance Co., Progressive Preferred Insurance Co., Progressive Security Insurance Co., Progressive Southeastern Insurance Co., Progressive Specialty Insurance Co., Progressive West Insurance Co.; and Progressive Commercial Holdings members Artisan & Truckers Casualty Co., Progressive Express Insurance Co. and United Financial Casualty Co.

The ratings are based on Progressive's very strong operating performance and risk-based capital position, market leading risk-management and underwriting expertise, and its significant personal and commercial auto insurance franchise, Fitch said.

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S&P Global Ratings revised its rating outlook on American International Group Inc. to negative from stable and affirmed its A+ insurer financial strength rating and BBB+ long- and short-term counterparty credit ratings on the company.

Additionally, S&P affirmed BBB+ counterparty credit ratings on AIG Financial Products Corp., AIG Life Holdings Inc., AIG-FP Matched Funding Corp. and American General Assignment Services Trust and affirmed its counterparty credit ratings and financial strength ratings at A+ on National Union Fire Insurance Co. of Pittsburgh Pa. along with AIG Asia Pacific Insurance Pte. Ltd., Variable Annuity Life Insurance Co., United States Life Insurance Co. in the City of New York, New Hampshire Insurance Co. Thailand, New Hampshire Insurance Co., Lexington Insurance Co., Insurance Co. of the State of Pennsylvania, Illinois National Insurance Co., Granite State Insurance Co., Commerce & Industry Insurance Co., American International Reinsurance Co. Ltd., American Home Assurance Co., American General Life Insurance Co., AIU Insurance Co., AIG Specialty Insurance Co., AIG Property Casualty Co., AIG Korea Inc., AIG Insurance Hong Kong Ltd., AIG Insurance Co. of Canada, AIG Europe Ltd. and AIG Assurance Co.

S&P also affirmed its A counterparty credit ratings and financial strength ratings at A on AIG Insurance New Zealand Ltd., AIG Insurance Co. China Ltd., AIG Australia Ltd., AIG MEA Ltd., AIG Life Holdings Inc., AIG-FP Matched Funding Corp. and American General Assignment Services Trust.

The rating agency said the outlook revision reflects AIG's protracted period of delivering property and casualty commercial insurance underwriting initiatives. The negative outlook reflects pressure on AIG's delivery on sustainable improvements in its operating fundamentals while retaining its competitive resiliency.

The ratings affirmation is based on the company's excellent business risk profile and strong financial risk profile, S&P said.

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S&P Global Ratings revised its outlook on Maiden Holdings Ltd. and its operating subsidiaries to negative from stable.

Additionally, the rating agency affirmed its BBB- long-term counterparty credit ratings and BBB- senior unsecured ratings on Maiden Holdings and Maiden Holdings North America Ltd.

S&P also affirmed its BBB+ long-term counterparty credit and financial strength ratings on Maiden Reinsurance Ltd. and Maiden Reinsurance North America Inc.

The rating agency said the outlook revision reflects its view that the recent operating performance of Maiden Holdings and its operating subsidiaries may reflect weaker fundamentals in its business risk profile. The rating agency views Maiden's businesses as exposed to inherent sensitivities to claims inflation, regulatory reforms and macroeconomic conditions that could affect its overall operating results.

The affirmation reflects Maiden's adequate competitive position based on its substantial reliance on AmTrust Financial Services Inc. and Maiden's business concentration in workers' compensation. The ratings also reflect the company's upper-adequate financial risk profile, less than adequate financial flexibility and adequate liquidity, S&P added.

The negative outlook reflects the rating agency's view that if Maiden's underwriting performance continues to weaken, S&P could lower the ratings on the company by one notch.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.