Best Sees No Change in Zurich’s Ratings

A.M. Best Co. has issued a statement indicating that it sees no change in the ‘A’ (Excellent) financial strength ratings of Zurich Financial Services Group (ZFS) and its core subsidiaries, following the release yesterday of third quarter and nine-month earnings results for 2003. (See IJ Web site Nov.19)

“These financial strength ratings remain unchanged after announced earnings, in line with A.M. Best’s expectations, of USD 1.4 billion (an improvement of USD 4.2 billion year-on-year) and a reduced consolidated combined ratio of 98.2% (114.8% over the same period in 2002),” said Best. It also said it would maintain a “positive” outlook on the ZFS group.

Best did express concerns over the continued weak performance of Bermuda-based Centre Solutions Ltd., ZFS niche financial unit, and indicated that its rating is “currently under review with negative implications.”

ZFS strengthened Centre’s reserves by $354 million before tax in the third quarter 2003, but “does not anticipate further adverse development,” said the bulletin. Best indicated it would “continue to closely monitor Centre’s reserve position.”