A.M. Best Co. stated the financial strength rating of A++ (Superior) of the Chubb Group of Insurance Companies, (NYSE: CB) (Warren, NJ), the “aa” senior debt ratings of The Chubb Corporation, Chubb Capital Corporation and Chubb Executive Risk Inc., the “aa-” ratings of the capital securities of Executive Risk Capital Trust and the AMB-1+ rating on the commercial paper issued by Chubb Capital are unaffected by the announcement that the group took a $625 million pretax charge to increase reserves for asbestos liabilities in the third quarter 2002. The increase in reserves is based on an independent actuarial analysis of Chubb’s ongoing asbestos exposures.
The current ratings previously considered A.M. Best’s estimate of the potential asbestos and environmental (A&E) reserve shortfall in the evaluation of capitalization, and the third quarter charge was within that estimate.
Additionally, the strength of Chubb’s earnings has enabled it to absorb this charge without depleting capital. A.M. Best views the recognition of such liabilities as positive in that it strengthens existing A&E reserves and Chubb’s conservative balance sheet.