Ratings Recap: Allied World, Dongbu, Bluewater

January 7, 2008

Standard & Poor’s Ratings Services has affirmed its ‘BBB’ counterparty credit and senior debt ratings on Bermuda-based Allied World Assurance Co. Holdings Ltd. and affirmed its ‘A-‘ counterparty credit and financial strength ratings on Allied World’s operating subsidiaries with a stable outlook. S&P also assigned its preliminary ‘BBB’ senior debt and ‘BBB-‘ subordinated debt ratings to the Group’s recently filed universal shelf registration. “The ratings are based on Allied World’s good competitive position, strong inception-to-date operating performance, very strong capital adequacy, and low expense ratio relative to peers,” said S&P. “Partially offsetting these factors are the group’s relatively short operating history and potential reserve risk related to its relatively high proportion of casualty writings.”

A.M. Best
Co. has revised the rating outlook to positive from stable for South Korea’s Dongbu Insurance Company, Ltd. and has affirmed its financial strength rating of ‘A-‘ (Excellent) and issuer credit rating of “a-“. Best said the “ratings reflect the company’s superior operating performance, stable capitalization, improved auto loss ratio in the motor portfolio and diversified distribution channels.” It also indicated that “Dongbu maintains an excellent profit structure in the Korean non-life market. Due to the company’s low expense structure and profit orientation by management, the company maintains one of the highest profit levels in the industry, which helps it accumulate capital more quickly than its peers.”

Standard & Poor’s Ratings Services has placed its ‘BBB’ long-term counterparty credit and insurer financial strength ratings on Oslo-based non-life insurer Bluewater Insurance ASA on CreditWatch with negative implications. “The CreditWatch placement follows the profit warning Bluewater announced to the Oslo Stock Exchange on Jan. 4, 2008, in which it advised of an estimated trading loss of Norwegian krone (NOK) 90 million in the final quarter of 2007.” S&P added that at present it has “little further information,” but will be having “discussions with Bluewater’s management team.”

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