Zurich 'A+' Affirmed

The 'A+' financial strength rating (FSR) on Zurich Financial Services Group was affirmed by A.M. Best. The rating is applicable to Zurich Insurance Co. as well as its core life, non-life and reinsurance operations in the U.S. Affiliated members of the Zurich U.S. Group are: Zurich Reinsurance North America Group; Zurich Re (Cologne); Farmers Insurance Group; Zurich Kemper Life; and Farmers New World Life. These group members are led by Zurich American Insurance Co. The group rating was also extended to the life affiliates of Zurich Financial Services in the U.K.

Reliance Downgraded

Reliance Group Holdings Inc. senior debt ratings were lowered from 'C' to 'D' by Fitch following Reliance's missed scheduled payments of bank borrowings due Nov. 10 and of senior notes due Nov. 15. On the latter date, Reliance also failed to make a scheduled interest payment on its senior subordinated debt. Reliance Insurance Group's insurer FSR remains at 'DDD.'

PMA Rating Changed

The FSR of PMA Capital Insurance Co. was changed from 'A+' to 'A' by A.M. Best, which noted that the change reflects near-term implications of the reinsurer's corporate realignment and recent deterioration in profitability. However, A.M. Best indicated that positive implications of the restructuring were also taken into account. The realignment involved the subsidiaries of PMA Capital Corp; the holding company of PMA Reinsurance Corp., afterwards renamed PMA Capital Insurance Co.; PMA Insurance Group; and Caliber One Indemnity Co.

Alliance Re Gets 'B++'

A 'B++' FSR was assigned to Alliance International Reinsurance Company by A.M. Best. The rating reflects factors including Alliance Re's strong initial capitalization, experienced executive team and proposed operation as a property/casualty reinsurer in select geographical regions. Also taken into account is the expectation that the company will be listed on the Cyprus Stock Exchange by early 2001, at which time the capital will be fully paid up. Additionally, A.M. Best stated that the reinsurance program is expected to be placed in line with Alliance Re's business plan.

Due to its status as a start-up venture, the rating process for Alliance Re included an in-depth assessment of its management's ability to meet the business plan, a factor which will largely influence future rating.

General Agents Downgraded

Following the release of third-quarter 2000 earnings by the General Agents Group, the company's FSR was lowered from 'A' to 'A-' by A.M. Best, which noted that the downgrade reflected a decrease in the company's capitalization into the lower range and an erosion of historical earnings. Although a restoration of earnings and capital to the 'A' range would seem, in Best's opinion, difficult in the near-term, it was noted that General Agents Group's capitalization remains excellent.