Ratings Recap: Max Capital, Kenya Re, Tunis Re, Gothaer, Chung Kuo

October 17, 2007

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A-‘ (Excellent) and the issuer credit ratings (ICR) of “a-” of Max Bermuda Ltd. and its affiliated companies. Best also affirmed the ICR of “bbb-” of Max Capital Group Ltd. and the debt rating of “bbb-“of $100 million 7.20 percent senior notes due April 2017 for Delaware-based Max USA Holdings Ltd., as well as the existing shelf ratings of both companies. The outlook for all ratings is stable. “These ratings reflect Max’s diversified book of traditional property/casualty products, along with its life/annuity business, solid operating results and effective risk management controls,” said Best.

A.M. Best Co. has affirmed the financial strength rating of ‘B+’ (Good) and the issuer credit rating (ICR) of “bbb-” of Kenya Reinsurance Corporation Limited (Kenya Re), but has revised the outlook for both ratings to negative from stable. “The negative outlook reflects Kenya Re’s inadequate risk management with regards to catastrophe exposure and the quality of its outwards reinsurance securities as well as concerns over the company’s effectiveness of internal controls given the fraud investigations on members of the company’s ex-management,” Best explained.

A.M. Best Co. has assigned a financial strength rating of ‘B+’ (Good) and an issuer credit rating of “bbb-” to Societe Tunisienne de Reassurance (Tunis Re) with a stable outlook. “The ratings reflect Tunis Re’s strong risk-adjusted capitalization and a very good domestic business profile,” said Best. “Partially offsetting factors are the dependence on a small number of cedants in Tunisia and both the company’s limited size and visibility in the international markets.”

Standard & Poor’s has assigned its ‘A-‘ counterparty credit and insurer financial strength ratings to Germany’s Gothaer Krankenversicherung AG (GK) with a stable outlook. “The ratings reflect the core status of GK to Gothaer group’s strategy, due to the close integration in terms of operational management and its significant contributions to the group’s overall competitive position and financial strength,” explained S&P credit analyst Ralf Kuerzdoerfer. S&P also noted that “GK complements the product lines of core sister companies Gothaer Allgemeine Versicherung AG (GA; A-/Stable/–) and Gothaer Lebensversicherung AG (GL; A-/Stable/–).

Standard & Poor’s Ratings Services has affirmed its ‘BBB+’ insurer financial strength and counterparty credit ratings on Chung Kuo Insurance Co. Ltd. with a stable outlook. “The ratings continue to reflect Chung Kuo’s strong capitalization and good niche position in Taiwan’s commercial insurance market,” noted S&P credit analyst Connie Wong. “These strengths are offset by the company’s volatile underwriting performance, which is partly because of its exposure to commercial insurance.”

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