Ratings Recap: Darwin, First American, CIGNA, First Marine, SUA, Tailwind/Northwind/Unum

February 12, 2008

A.M. Best Co. has assigned an issuer credit rating (ICR) of “bbb-” to Darwin Professional Underwriters, Inc. (DPUI) of Wilmington, Del. and has affirmed the financial strength rating (FSR) of ‘A-‘ (Excellent) and ICRs of “a-” of the Darwin Group, with a stable outlook. DPUI is the publicly-traded parent of Darwin. “These ratings reflect Darwin’s supportive capitalization, experienced management team and familiarity in writing specialty insurance products,” said Best. “Furthermore, the ratings also consider management’ s intention to prudently manage and allocate capital in accordance with levels previously discussed with A.M. Best.”

Fitch Ratings has downgraded the following ratings of The First American Corporation (FAF) – Issuer Default Rating (IDR) to ‘BBB+’ from ‘A-‘; senior unsecured debt to ‘BBB’ from ‘BBB+’.
First American Capital Trust – Trust preferred securities to ‘BBB-‘ from ‘BBB’; First American Insurance Companies (First American Group) – Insurer Financial Strength (IFS) to ‘A’ from ‘A+’. In addition Fitch has placed all of the ratings on Rating Outlook Negative. The rating action “is based on further analysis of the company’s pre-announced fourth quarter results, in which the company noted it would generate an after-tax loss not to exceed $50 million, and that the title insurance segment’s results would be negatively affected by further adverse reserve development,” said Fitch. The bulletin also noted that these actions “resolve the Negative Watch placed on the company after its announced plan to spin off its information services unit. Fitch also highlights that post spin off, First American Financial, will not have access to unregulated cash flows to service its debt.”

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and the issuer credit ratings (ICR) of “a” for the following insurance subsidiaries of CIGNA Corporation, Connecticut General Life Insurance Company, Life Insurance Company of North America and CIGNA Life Insurance Company of New York. Best also affirmed the FSR and ICRs of CIGNA’ s health maintenance organizations (HMO) and its dental subsidiaries, as well as the ICR and debt ratings of CIGNA. The outlook for all ratings is stable. “The ratings of the subsidiaries are based on CIGNA’ s consistent trend in operational earnings, growth in membership and its sizable market share relative to its peers,” said Best. “The health-care segment has recorded strong operational margins and contributes to a large portion of the revenues and debt service for CIGNA. Included in the health-care segment is the specialty health-care lines of business, which include dental, pharmacy and behavioral health.”

A.M. Best Co. has upgraded the financial strength rating (FSR) to ‘A-‘ (Excellent) from ‘B++’ (Good) and the issuer credit rating (ICR) to “a-” from “bbb” of First Marine Insurance Company of Osage Beach, Mo., and has removed the ratings from under review with positive implications and assigned a positive outlook. “The rating upgrades reflect First Marine’ s improved financial flexibility as a result of its recently completed acquisition by American Modern Home Insurance Company (Amelia, OH), a member of American Modern Insurance Group (Cincinnati, OH),” said Best. “The positive outlook is based on A.M. Best’ s expectation that First Marine will be added to American Modern Insurance Group’ s pooling agreement in the near term.”

A.M. Best Co. has affirmed the financial strength rating of ‘B+’ (Good) and the issuer credit rating of “bbb-” of SUA Insurance Company with a stable outlook. “The ratings reflect SUA’s solid capitalization, improved earnings in each of the last two years and the financial flexibility afforded SUA through its publicly traded parent, Specialty Underwriters’ Alliance, Inc.,” said best. “The ratings also recognize the significant experience of SUA’s management team and its planned diversification of specialty product offerings.”

A.M. Best Co. has placed the debt rating of “aaa” of the $130 million Series A floating rate senior secured notes, due 2036 (notes) issued by Tailwind Holdings, LLC and the $800 million of floating rate senior secured notes, due 2037, issued by Northwind Holdings, LLC under review with negative implications. Both companies are wholly owned subsidiary of Unum Group. Best took similar action last month (See IJ web site –

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