A.M. Best Co. has affirmed the financial strength rating (FSR) of “A” (Excellent) and the issuer credit rating (ICR) of “a” of the >New York-based QBE Re Group – U.S. and its subsidiaries. The rating action applies to Philadelphia-based QBE Reinsurance Corporation, QBE Insurance Corporation and QBE Specialty Insurance Company headquartered in Bismarck, ND. Best also affirmed the FSR of “A-” (Excellent) of NFU Group of Greenwood Village, Colo. and its subsidiaries and the ICR of “a-” of National Farmers Union Property and Casualty Company and United Security Insurance Company, also located in Greenwood Village. The rating outlook is stable for all companies.
“The rating reflects QBE Re’s strong risk-adjusted capital position, strong underwriting controls and favorable operating performance in recent years,” said Best. “The rating also reflects the support of the group’s ultimate parent, QBE Insurance Group Limited, one of Australia’s largest insurance/reinsurance organizations, which has provided capital and reinsurance support in recent years.
“The group received a total of $200 million of capital contributions from its parent from 2003 through 2005 to support the U.S. group’s premium growth and other initiatives. Additionally, QBE Re further benefited in 2004 and 2005 from a catastrophe cover placed by the parent group, limiting net U.S. hurricane losses. In previous years, the group benefited from affiliated reinsurance protections, including protection for the facultative casualty business.”
Best noted that “despite industry-wide pricing pressure,” it “believes that premium growth in program manager-produced business is partially mitigated by QBE Re’s commitment to maintaining pricing adequacy and prudent underwriting controls over this business. QBE Re’s acquisition of National Farmers Union Property and Casualty Company and its wholly owned subsidiary, United Security Insurance Company, in 2005 allows QBE Re to expand its business in regional states and classes of business that are complementary to its existing sizeable operations.”
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