Ratings Recap: China (NZ), Hannover ReTakaful, Fairfax, Radian (Europe)

December 5, 2007

A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and the issuer credit rating (ICR) of “bbb-” of China Insurance (NZ) Company Limited of New Zealand with a stable outlook. The ratings reflect China Insurance’s improved capitalization,
conservative investment portfolio and downward trend in underwriting performance. The ratings also acknowledge China Insurance’s new operating and strategic initiatives,” said Best.

Standard & Poor’s Ratings Services has assigned its ‘A’ long-term counterparty credit and insurer financial strength ratings to Bahrain-based reinsurer Hannover ReTakaful B.S.C. with a stable outlook. “The ratings on Hannover ReTakaful reflect its strategic importance to its parent, Hannover Re group (Hannover Re or the group; AA-/Stable/–),”S&P noted. The ratings also reflect Hannover ReTakaful’s conservative investment portfolio and strategy, and strong capitalization, which are offset by its modest competitive position in the global reinsurance markets and start-up strain affecting earnings in the short term.”

Fitch Ratings has upgraded its ratings on Fairfax Financial Holdings Limited and a number of its major subsidiaries as follows:
Fairfax – Issuer Default Rating (IDR) to ‘BB+’ from ‘BB-‘; –Senior debt to ‘BB’ from ‘B+’.
Odyssey Re Holdings Corp – IDR to ‘BBB’ from ‘BBB-‘; Senior debt to ‘BBB-‘ from ‘BB+’.
Odyssey America Reinsurance Corp – Insurer financial strength (IFS) to ‘A-‘ from ‘BBB+’.
Crum & Forster Holdings Corp. – IDR to ‘BB+’ from ‘BB-‘; Senior debt to ‘BB’ from ‘B+’.
Crum & Forster Insurance Group – IFS to ‘BBB’ from ‘BBB-‘.
Northbridge Financial Insurance Group – IFS to ‘BBB+’ from ‘BBB’.
Fitch also affirmed and withdrew the holding company ratings of TIG Holdings, Inc. and the insurance company ratings of TIG Insurance Group that are in runoff. Fitch said its “two-notch upgrade of Fairfax’s IDR and debt ratings reflect the holding company’s considerably improved overall financial profile, with reductions in financial leverage, increased interest coverage, improved operating performance and continued favorable financial flexibility. The upgrade of Fairfax’s operating company IDR, debt and IFS ratings reflect more standalone financial profiles, as the ratings were previously held down one full notch due to parent company issues. The two-notch upgrade of Crum & Forster Holdings Corp.’s (CFHC) IDR and senior debt rating also reflects standard notching as upstream dividends from Crum & Forster Insurance Group (C&F) have been restored.”

Standard & Poor’s Ratings Services said today that it withdrew its ‘AA’ counterparty credit and financial strength ratings on Radian Europe Ltd. (REL) at the company’s request. The outlook had been negative. “REL’s parent, Radian Group Inc., has decided to discontinue mortgage insurance operations at REL and focus its international efforts on Hong Kong and Australia. “We believe REL has no outstanding policyholder obligations,” explained S&P credit analyst James Brender.

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