Standard & Poor’s Ratings Services has issued a statement on Fireman’s Fund Insurance Co.’s announcement that it is increasing its asbestos reserves and reserves for uncollectible reinsurance related to asbestos by $882 million. S&P currently rates Fireman’s Fund “A” with a stable outlook.
“This action has no rating implications for the insurer,” said S&P. The rating agency noted that it had “acknowledged the likelihood for asbestos reserve strengthening in 2005 and the probability that the cost would be largely covered by reinsurance,” in a report issued on Aug. 22, 2005.
S&P said “the $882 million is within the range previously expected by Standard & Poor’s, and it is largely covered by reinsurance with parent Allianz AG. For year-end 2005, Fireman’s Fund is expected to maintain a strong Standard & Poor’s capital adequacy ratio of 135 to 150 percent.”
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