Best Affirms Allstate Rating, Revises Selected Outlooks

November 7, 2005

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) with a revised outlook of stable and the issuer credit ratings (ICR) of “aa” with a revised outlook of negative for Allstate Insurance Group (Allstate) and its members. A.M. Best has also affirmed the debt ratings of The Allstate Corporation’s existing debt securities with a revised outlook of negative. The outlook for all of the above ratings had previously been positive.

Best also affirmed the FSRs and ICRs for the life/health member companies of Allstate Financial and its affiliates. The outlook for the FSRs remains stable. The outlook for the ICRs has been revised to negative from stable. A.M. Best has also affirmed the debt ratings of the outstanding notes issued under Allstate Life Insurance Company’s various funding agreement-backed securities (FABS) programs with a revised outlook of negative.

Allstate’s strong non-catastrophe operating performance is derived from its solid underwriting capabilities and consistent stream of investment income from a well-diversified conservative portfolio. The favorable operating performance reflects Allstate’s tightened underwriting guidelines, improved risk segmentation along with adequate pricing and favorable loss trends. Additionally, underwriting results in recent years reflect the favorable impact of Allstate’s various expense management initiatives and its significant investment in technology.

Offsetting these favorable considerations is Allstate’s inherent exposure to natural disasters due to its expansive market presence throughout the United States. This exposure has been particularly evident in 2004 and 2005 which have generated over $4.9 billion in net after-tax catastrophe losses.

Furthermore, Allstate has property catastrophe reinsurance protection only in some of the states that experienced significant losses. The group is currently analyzing strategic options to reduce its exposure in catastrophe-prone areas, including stricter underwriting guidelines, policy transfers, increased deductibles and an enhanced property catastrophe reinsurance program.

For a complete listing of The Allstate Corporation’s financial strength, debt and issuer credit ratings, visit

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