Best Reaffirms Ratings of Skandia Insurance Co.

A.M. Best Co. reaffirmed that the financial strength rating of A- (Excellent) of Sweden’s Skandia Insurance Company Ltd. “remains unchanged and the outlook remains positive” following the company’s announcement last Wednesday that chief executive Lars-Eric Petersson has left the company and its board.

Petersson lost the confidence of shareholders after a series of poor results dramatically lowered Skandia’s share price. The company posted a loss of 4.5 billion kronor ($527.8 million) for the quarter ended Dec. 31, compared to a profit of 175 million kronor ($20.77 million) a year earlier. He has been replaced, at least temporarily, by deputy chairman, Leif Victorin as acting CEO. Petersson had been CEO since 1997, and started with Skandia in 1993.

Best said that although Skandia has announced that it will be “reviewing its existing strategy,” it does “not expect a significant change in Skandia’s business profile in the short-term.” The current rating “reflects Skandia’s significant market share in Sweden and the United Kingdom, improving capitalisation following its divestment of American Skandia Life Assurance Company (ASLAC) to Prudential America and improving earnings,” said the bulletin. It added that Best would “continue to monitor the development of Skandia’s risk-based capitalisation and cash flow position as Skandia’s financial and strategic plans develop following this change in management.”