Ratings Recap: Ariel Re, Atrium, Malaysian Re, AMI, TM Asia, Bangkok Ins., Karlsruher

October 12, 2007

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A-‘ (Excellent) and the issuer credit rating (ICR) of “a-” of Ariel Reinsurance Company Ltd. Best also affirmed the ICR of “bbb-” of Ariel Holdings, Ltd., removed the ratings from under review with negative implications and assigned a stable outlook. The rating actions follow the announcement that Ariel’s offer has been declared wholly unconditional with respect to the UK-based Atrium Underwriting plc, which owns the managing agent that operates Lloyd’s Syndicates 570 and 609.
In a companion announcement A.M. Best said it had affirmed the issuer credit rating (ICR) of “bbb+” of Atrium Underwriting plc, and removed the “under review status of the rating that was applied when the takeover offer of Ariel Holdings Limited (Bermuda) was announced in July 2007.” Best subsequently withdrew Atrium’s rating following the delisting of the company’s ordinary shares from the London Stock Exchange.

A.M. Best Co. has affirmed the financial strength rating of ‘A-‘ (Excellent) and the issuer credit rating of “a-” of Malaysian Reinsurance Berhad (Malaysian Re) with a stable outlook. “The ratings reflect Malaysian Re’s stable underwriting performance, stable investment income and low catastrophe exposure,” said Best. “The ratings also recognize the company’s business plan to further expand its market presence in the Middle East.”

A.M. Best Co. has affirmed the financial strength rating of ‘A’ (Excellent) and the issuer credit rating (ICR) of “a+” for New Zealand’s AMI Insurance Limited, and ahs assigned them a positive outlook. “The ratings are based on an analysis of the consolidated financial accounts of the AMI Members Trust, of which AMI is the only operating entity,” Best explained. “The rating affirmations reflect AMI’s secured distribution platform, strong risk-adjusted capitalization, profitable underwriting results and consistently strong growth in operating surplus, as well as its good quality investment portfolio.”

Standard & Poor’s Ratings Services has revised its outlook on Singapore-based insurer TM Asia Insurance Singapore Ltd. (TM Asia) to positive from stable following the parent group’s announcement of a merger of TM Asia and its sister company, Tokio Marine & Fire Insurance Co. (Singapore) Pte. Ltd. S&P also affirmed the ‘A+’ long-term local currency counterparty credit rating and insurer financial strength ratings on TM Asia. “Following the merger, which is subject to regulatory approval, TMS’ rating will be withdrawn as TM Asia will be the surviving entity,” S&P noted. The rating agency added that the outlook revision reflects its “expectation that the merger will improve Tokio Marine & Nichido Fire Insurance Co. Ltd.’s (Tokio Marine; local currency AA/Stable/A-1+) overall management efficiency on its non-life operations in Singapore.”

Standard & Poor’s Rating Services said today that it has assigned its ‘A-‘ insurer financial strength rating and counterparty credit rating to Bangkok Insurance Public Co. Ltd. with a stable outlook. “The ratings on Bangkok Insurance reflect the company’s strong competitive position within Thailand’s property and casualty insurance industry and a more diversified business mix than its domestic peers’,” explained S&P credit analyst Paul Clarkson. “The company also exhibits a strong operating performance and an adequate capital position. Counterbalancing factors include its aggressive investment profile, some asset concentration risk, and market risk.” In addition S&P noted that “Bangkok Insurance is one of the leading property and casualty insurers in Thailand with a market share in terms of gross premiums written of about 7 percent in 2006, ranking third in the industry. The company has a diversified portfolio with less concentration in the motor line, at 44 percent of gross premiums compared with 60 percent for the industry.”

Standard & Poor’s Ratings Services said that it has withdrawn its ‘BBB+’ counterparty credit and insurer financial strength ratings on property/casualty insurer, Karlsruher Versicherung AG (KV), and life insurer Karlsruher Lebensversicherung AG (KLV), both core operating entities of Germany’s Wüstenrot & Württembergische bancassurance group (W&W group; BBB+/Stable/–). “The rating action follows the completion of the mergers of KV into Württembergische Versicherung AG and KLV into Württembergische Lebensversicherung AG, which are the group’s main non-life and life insurance operations,” S&P explained.

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