Ratings Roundup: Fuji Fire, Greenlight Re

January 30, 2012

A.M. Best Co. has upgraded the financial strength rating to ‘A-‘ (Excellent) from ‘B++’ (Good) and the issuer credit rating to “a-” from “bbb+” of The Fuji Fire & Marine Insurance Company, Limited, and has removed both ratings from under review with positive implications and assigned a stable outlook. Best said the “ratings reflect Fuji’s favorable risk-adjusted capitalization. The ratings also consider the continued parental support from the American International Group, Inc., in the areas of sales cooperation, underwriting and strategic initiatives. Fuji’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is adequate and has improved for two consecutive years. In addition, the company’s local solvency margin ratio stood at 628.6 percent as of September 30, 2011 under the revised standard to be applied from March 31, 2012. Both these indicators are currently supportive of Fuji’s ratings.” As partial offsetting factors Best cited Fuji’s “low growth momentum and relatively high net underwriting leverage.” The report added that “Fuji’s market position has deteriorated in the midst of intense competition and premium decline. Over the past two years, its overall market share has declined to 3.8 percent from 4.0 percent on a net premium written basis.”

A.M. Best Co. has commented that the financial strength ratings of ‘A’ (Excellent) and issuer credit rating of “a” of Cayman Islands-based Greenlight Reinsurance, Ltd. are unchanged following the UK’s Financial Services Authority’s actions against Greenlight Capital, Inc., its former compliance officer and David Einhorn, President of Greenlight Capital, Inc. and Chairman of the Board of Greenlight Re. The outlook for both ratings remains stable. Best said it has “analyzed the pertinent information and has decided that at this time there is no impact from these events on the financial strength or claims paying ability of Greenlight Re.” The rating agency will, however, “continue to closely monitor the situation.”

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