S&P Announces Rating Actions on ESG Re Subs, Fondaria Group and Le Mans Re

November 26, 2001

Standard & Poor’s announced that it has raised its counterparty credit and insurer financial strength ratings on the principal subsidiaries of Bermuda’s ESG Re Ltd; has assigned an initial single-‘A’-minus rating to the core operating entities of Italy’s La Fondaria insurance group, and revised its outlook on Le Mans Re from “developing” to “positive.”

ESG’s European Specialty Reinsurance (Bermuda) Ltd., ESG Reinsurance Ireland Ltd., and European Specialty Ruckversicherung were all raised to double-‘B’-minus from single-‘B’-plus on the strength of “improved prospective capital adequacy, improved earnings prospects, and the strict underwriting controls enforced by ESG management,” said the announcement. It also revised its outlook from “Stable” to “Positive.”

S&P rated La Fondaria Assicurazoni SpA and Milano Assicurazioni Spa, the two core operations of La Fondaria Group, for the first time. It also placed the companies on CreditWatch with developing implications, due to share purchases of the company’s stock from Italian conglomerate Montedison Spa by competitor Societa Assicuratrice Industriale Spa

Le Mans Re’s single-‘A’-minus rating outlook was revised from developing to positive in recognition of XL Capital’s confirmation that it would raise its stake in the French-based reinsurer to 67 percent before the end of the year, and commitments from XL and Les Mutuelles du Mans Assurances IARD, the other stakeholder, to raise an additional $54.9 million in capital. (See IJ Website
Oct. 31).

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