A.M. Best Co. has removed the ratings from under review with negative implications and affirmed the financial strength rating of B+ (Good) and issuer credit rating of “bbb-” of Utah-based Great Western Insurance Company, but has assigned them a negative outlook. Best said its “rating actions reflect Great Western’s maintenance of adequate capitalization through a coinsurance agreement effective December 31, 2008. This agreement provided the company with capital, through ceding commissions, to offset significant capital losses in 2008 due to impairments of collateralized debt obligations (CDOs). The company’s investment losses—including these impairments—had previously led to a significant decline in its absolute and risk-adjusted capitalization prior to the execution of the coinsurance agreement.” Best also indicated that although the situation had improved, it nonetheless “anticipates that Great Western’s balance sheet will remain under financial pressure, as additional investment impairments are possible going forward. The company currently has a significant unrealized loss position in its fixed income portfolio, including CDOs. As a result, the rating outlook is negative. Great Western continued to grow its direct premium in the pre-need marketplace during 2008 and maintained positive operating results on a statutory basis.”
A.M. Best Co. has removed from under review with positive implications and affirmed the financial strength rating (FSR) of ‘B++’ (Good) and issuer credit rating (ICR) of “bbb” of Connecticut Life & Casualty Insurance, and has assigned them a positive outlook. Best then withdrew the ratings and assigned a category NR-5 (Not Formally Followed) to the FSR and an “nr” to the ICR, due to the merger of Connecticut Life & Casualty into Response Worldwide Insurance Company, a member of the Delaware-based Response Insurance Group. “Connecticut Life & Casualty was a member of the Response pool of companies,” Best explained. Those ratings are currently “under review with positive implications pending the finalization of a reinsurance agreement with Trinity Universal Insurance Company (Dallas, TX), a subsidiary of Response’s current ultimate parent, Unitrin Inc. (Chicago, IL),” Best concluded.
Was this article valuable?
Here are more articles you may enjoy.