Ratings Recap: Old Mutual, Ariel, SCR

September 26, 2007

A.M. Best Co. has affirmed the issuer credit rating (ICR) of “a-” and the existing debt ratings of the UK branch of Old Mutual plc (OM). Best also affirmed the financial strength ratings (FSR) and ICRs of OM’s key European and South African entities, as well as it U.S. life operations. The outlook on all of the ratings is stable. “The ratings reflect OM’s strong business profile, stable financial performance and strengthened risk-adjusted capitalization,” said Best. “OM has, through its subsidiaries, leading business positions in the South African life and non-life markets, as well as in Scandinavian and U.K. life markets. The acquisition of Skandia has strengthened the company’s position, providing it with a top ten position in the U.K. life market and strong presence in Germany and Colombia.”

A.M. Best Co. commented that the financial strength rating of ‘A-‘ (Excellent) and the issuer credit rating (ICR) of “a-” of the Bermuda-based Ariel Reinsurance Company Ltd. (Ariel Re) and the ICR of “bbb-” of Ariel Holdings, Ltd. remain unchanged following Ariel’s announcement that it intends to acquire Valiant Insurance Company, which is based in Iowa. “The above ratings were placed under review with negative implications on July 20, 2007, following Ariel’s announcement regarding its acquisition of Atrium Underwriting Plc.,” Best noted. The rating agency also indicated that it “continues to closely monitor Ariel, as it does all start-ups, which are part of the ‘Class of 2005,’ and has been kept apprised of plans regarding the Valiant acquisition.”

Standard & Poor’s Ratings Services has affirmed its ‘BBB’ long-term counterparty credit and insurer financial strength ratings on Morocco-based reinsurer Société Centrale de Réassurance (SCR) with a positive outlook, “reflecting the positive outlook on the Kingdom of Morocco (foreign currency BB+/Positive/B, local currency BBB/Positive/A-3).” S&P credit analyst Julien Parasie also indicated that the “ratings reflect SCR’s public-policy institution status, based on 94 percent ownership by the state financial institution Caisse de Dépôt et de Gestion, and an unconditional governmental guarantee protecting SCR’s balance sheet.”

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