St. Paul Cos. Revised

Standard & Poor's removed St. Paul Cos. Inc. and its subsidiaries from CreditWatch and lowered its counterparty credit rating on the St Paul Cos. to "BBB+" from "A-", due to the company's challenges executing certain strategic actions and its lower-than-expected capital adequacy for St. Paul's combined operating insurance companies. The removal from CreditWatch, however, reflects the strength of the group's core business.

The outlook on the St. Paul Cos. remains negative. S&P expects that the company will concentrate its resources on its profitable core commercial book of business. St. Paul enjoys strong brand recognition in the domestic primary commercial market. By year-end 2002, S&P expects that the company's capital adequacy will return to very strong levels because of increased retention of earnings and other capital-raising initiatives. Capital adequacy should exceed 150 percent, with continued strong financial flexibility.

American Horizon Rated to 'R'

S&P revised its financial strength rating on American Horizon Insurance Co. to "R" from double-"Bpi" after learning that the Cook County Circuit Court issued a liquidation order with a finding of insolvency against the company on July 11, 2002.

Before this court action, the Illinois Department of Insurance determined that the company was operating in hazardous financial condition. As of Dec. 31, 2001, American Horizon reported $3 million in capital and negative $962,204 in surplus, resulting in a statutory surplus impairment of almost $1.5 million. As of March 31, 2002, the company reported a negative policyholder surplus of about $2.8 million.

The company is also below the mandatory control level under risk-based capital requirements. American Horizon entered into an agreed corrective order with the Illinois Department of Insurance on March 1. The Illinois Insurance Guaranty Fund will be responsible for the covered claims of the company's Illinois policyholders.

American Horizon Insurance Co. is a wholly owned subsidiary of American Holdings Inc. The company is licensed in 13 states and mainly writes private passenger automobile insurance. It has been in run-off since June 2001, and has not written new business in 2002. In assigning its double-"Bpi" rating to American Horizon Insurance Co. (formerly Arcadia National Insurance Co.), S&P cited the company's high operating ratio, which indicates weak financial performance.

American Horizon is licensed in Illinois, Arizona, California, Florida, Georgia, Maryland, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Washington and Wisconsin.

Acceptance Companies Assigned

Fitch Ratings assigned a "B-" Long-Term issuer rating to Acceptance Insurance Companies Inc. (Acceptance) and a "CCC+" rating to Acceptance's $94.875 million 9.00 percent Trust Preferred Securities, due 2027. Acceptance is the parent company of Nebraska-based American Growers Insurance Company. The rating outlook is stable.

The rating considers the company's recent unfavorable, but improving, overall earnings and resulting weak debt coverage, the uncertainty of future earnings and cash flow to meet debt servicing needs, as well as the company's concentration in the crop insurance market.

American Growers offers a variety of crop insurance coverage. This segment reported an underwriting profit in 2001 of $10.1 million, a marked improvement from the underwriting loss of $22.6 million posted for the previous year. This improvement was due in part to more favorable weather conditions in 2001 compared to 2000.

Acceptance also has run-off property/casualty coverage through subsidiary Acceptance Insurance Company. These operations reported an underwriting loss of $34.0 million for 2001, compared to an underwriting loss of $21.2 million for the previous year. The increase in the loss was due in part to a reserve strengthening that the company undertook in the general liability lines of business.

American Growers had statutory total admitted assets of $193 million and policyholder's surplus of $75.4 million at Dec. 31, 2001. The company primarily writes multi-peril crop insurance and other crop insurance products. Net premiums written increased 51 percent in 2001 to approximately $81 million, due in part to the acquisition of the crop insurance assets of IGF Insurance Company during the year.

Lloyd's Syndicate Rated 'A'

A.M. Best has given Lloyd's syndicates 1003 and 2003—known as syndicate 1003/2003 (the syndicate)—a syndicate rating of "A."

The ratings of syndicate 1003/2003 are based on excellent operating performance, strict management control of underwriting, capital flexibility, carefully managed growth and strong business profile in addition to the financial strength of the Lloyd's market rating of "A-" (Excellent), which underpins the security of all Lloyd's syndicates. The ratings are based on A.M. Best specific syndicate criteria. An offsetting factor is the challenge from the greatly increased business volume expected in 2002.

The two syndicates both are managed by Catlin Underwriting Agencies Ltd. (CUAL) and underwrite business at Lloyd's in parallel. CUAL forms an integral part of the Catlin Westgen Group Ltd., a Bermuda holding company. Syndicate 1003 is supported by third-party capital providers outside the Catlin group, and syndicate 2003 is supported by the group's own Lloyd's corporate capital provider, Catlin Westgen Ltd.

Syndicate 1003/2003 has produced profits in every closed underwriting year since it began trading in 1985, and A.M. Best expects this profitability record to continue in each of the open years 2000 to 2002. The syndicate's record has been based on excellent underwriting performance, conservative reserving and prudent use of reinsurance.

To submit information to this department e-mail: ijtexas@insurancejournal.com.

St. Paul Cos. Revised

Standard & Poor's removed St. Paul Cos. Inc. and its subsidiaries from CreditWatch and lowered its counterparty credit rating on the St Paul Cos. to "BBB+" from "A-", due to the company's challenges executing certain strategic actions and its lower-than-expected capital adequacy for St. Paul's combined operating insurance companies. The removal from CreditWatch, however, reflects the strength of the group's core business.

The outlook on the St. Paul Cos. remains negative. S&P expects that the company will concentrate its resources on its profitable core commercial book of business. St. Paul enjoys strong brand recognition in the domestic primary commercial market. By year-end 2002, S&P expects that the company's capital adequacy will return to very strong levels because of increased retention of earnings and other capital-raising initiatives. Capital adequacy should exceed 150 percent, with continued strong financial flexibility.

American Horizon Rated to 'R'

S&P revised its financial strength rating on American Horizon Insurance Co. to "R" from double-"Bpi" after learning that the Cook County Circuit Court issued a liquidation order with a finding of insolvency against the company on July 11, 2002.

Before this court action, the Illinois Department of Insurance determined that the company was operating in hazardous financial condition. As of Dec. 31, 2001, American Horizon reported $3 million in capital and negative $962,204 in surplus, resulting in a statutory surplus impairment of almost $1.5 million. As of March 31, 2002, the company reported a negative policyholder surplus of about $2.8 million.

The company is also below the mandatory control level under risk-based capital requirements. American Horizon entered into an agreed corrective order with the Illinois Department of Insurance on March 1. The Illinois Insurance Guaranty Fund will be responsible for the covered claims of the company's Illinois policyholders.

American Horizon Insurance Co. is a wholly owned subsidiary of American Holdings Inc. The company is licensed in 13 states and mainly writes private passenger automobile insurance. It has been in run-off since June 2001, and has not written new business in 2002. In assigning its double-"Bpi" rating to American Horizon Insurance Co. (formerly Arcadia National Insurance Co.), S&P cited the company's high operating ratio, which indicates weak financial performance.

American Horizon is licensed in Illinois, Arizona, California, Florida, Georgia, Maryland, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Washington and Wisconsin.

Acceptance Companies Assigned

Fitch Ratings assigned a "B-" Long-Term issuer rating to Acceptance Insurance Companies Inc. (Acceptance) and a "CCC+" rating to Acceptance's $94.875 million 9.00 percent Trust Preferred Securities, due 2027. Acceptance is the parent company of Nebraska-based American Growers Insurance Company. The rating outlook is stable.

The rating considers the company's recent unfavorable, but improving, overall earnings and resulting weak debt coverage, the uncertainty of future earnings and cash flow to meet debt servicing needs, as well as the company's concentration in the crop insurance market.

American Growers offers a variety of crop insurance coverage. This segment reported an underwriting profit in 2001 of $10.1 million, a marked improvement from the underwriting loss of $22.6 million posted for the previous year. This improvement was due in part to more favorable weather conditions in 2001 compared to 2000.

Acceptance also has run-off property/casualty coverage through subsidiary Acceptance Insurance Company. These operations reported an underwriting loss of $34.0 million for 2001, compared to an underwriting loss of $21.2 million for the previous year. The increase in the loss was due in part to a reserve strengthening that the company undertook in the general liability lines of business.

American Growers had statutory total admitted assets of $193 million and policyholder's surplus of $75.4 million at Dec. 31, 2001. The company primarily writes multi-peril crop insurance and other crop insurance products. Net premiums written increased 51 percent in 2001 to approximately $81 million, due in part to the acquisition of the crop insurance assets of IGF Insurance Company during the year.

Lloyd's Syndicate Rated 'A'

A.M. Best has given Lloyd's syndicates 1003 and 2003—known as syndicate 1003/2003 (the syndicate)—a syndicate rating of "A."

The ratings of syndicate 1003/2003 are based on excellent operating performance, strict management control of underwriting, capital flexibility, carefully managed growth and strong business profile in addition to the financial strength of the Lloyd's market rating of "A-" (Excellent), which underpins the security of all Lloyd's syndicates. The ratings are based on A.M. Best specific syndicate criteria. An offsetting factor is the challenge from the greatly increased business volume expected in 2002.

The two syndicates both are managed by Catlin Underwriting Agencies Ltd. (CUAL) and underwrite business at Lloyd's in parallel. CUAL forms an integral part of the Catlin Westgen Group Ltd., a Bermuda holding company. Syndicate 1003 is supported by third-party capital providers outside the Catlin group, and syndicate 2003 is supported by the group's own Lloyd's corporate capital provider, Catlin Westgen Ltd.

Syndicate 1003/2003 has produced profits in every closed underwriting year since it began trading in 1985, and A.M. Best expects this profitability record to continue in each of the open years 2000 to 2002. The syndicate's record has been based on excellent underwriting performance, conservative reserving and prudent use of reinsurance.