A.M. Best Co. has upgraded the financial strength rating (FSR) to ‘A+’ (Superior) from ‘A’ (Excellent) and the issuer credit ratings (ICR) to “aa” from “a” of Allianz Global Corporate & Specialty, North America, which consists of Allianz Global Risks US Insurance Company (Allianz US) and its wholly owned subsidiary, Allianz Underwriters Insurance Company, both headquartered in Burbank, Calif.
Best also affirmed the FSR of ‘A’ (Excellent) and the ICRs of “a” of Fireman’s Fund Insurance Company of Novato, Calif. and its intercompany pool participants and reinsured affiliates. In addition Best has affirmed the ICR of “a” of Allianz of America Inc. (Delaware). The outlook for all ratings is stable. (See below for a detailed list of the companies and ratings.)
Best explained that the ratings reflect its “view that Allianz Global Corporate & Specialty, North America is an integral part of its ultimate parent company, Allianz Societas Europaea’s (Allianz SE) strategy. Allianz SE provides explicit support to Allianz Global Corporate & Specialty, North America in the form of a quota share reinsurance agreement, as well as a keepwell agreement.
“Other rating factors include Allianz Global Corporate & Specialty, North America’s excellent risk-adjusted capitalization, solid business franchise, improved underwriting and operating performance in recent years and anticipated earnings diversification through its expanding aviation portfolio.”
As “offsetting factors,” Best noted “the historically poor underwriting performance and the inherent risks associated with the recent growth in premium production.”
Best said the rating outlook reflects its “view that continued support from Allianz SE, along with improved underwriting processes and risk mitigation initiatives, will allow the group to generate improved and sustainable operating returns.
“The ratings for Fireman’s Fund recognize its solid stand-alone capitalization and significant improvement in underwriting and operating performance. The ratings also consider that the group’s strategic importance to Allianz SE, both explicit and implicit, was critical to Fireman’s Fund’s successful turnaround. This commitment remains vital to Fireman’s Fund’s current ratings.”
However, Best also indicated that “these positive ratings factors are somewhat offset by the group’s extremely poor underwriting and operating performance prior to 2003.”
Best said its outlook on Fireman’s Fund reflects its view that the Company “has turned the corner and will be able to generate strong results through a sustainable and profitable underwriting performance even during different market cycles.”
The FSR has been upgraded to ‘A+’ (Superior) from ‘A’ (Excellent) and ICRs to “aa” from “a” for Allianz Global Corporate & Specialty, North America and its following members:
Allianz Global Risks US Insurance Company
Allianz Underwriters Insurance Company
The FSR of ‘A’ (Excellent) and ICRs of “a” have been affirmed for Fireman’s Fund Insurance Company and its following intercompany pool participants and reinsured affiliates:
American Automobile Insurance Company
National Surety Corporation
The American Insurance Company
American Standard Lloyd’s Insurance Company
Associated Indemnity Corporation
Chicago Insurance Company
Fireman’s Fund County Mutual Insurance Company
Fireman’s Fund Indemnity Corporation
Fireman’s Fund Insurance Company of Hawaii, Inc.
Fireman’s Fund Insurance Company of Louisiana
Fireman’s Fund Insurance Company of Ohio
Interstate Fire & Casualty Company
Interstate Indemnity Company
The ICR of “a” has been affirmed for Allianz of America Inc.
Source: A.M. Best – www.ambest.com
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