A.M. Best Co. has affirmed the financial strength ratings (FSRs) of ‘A’ (Excellent) and issuer credit ratings (ICRs) of “a” of the operating insurance units of the former AIG Personal Lines Group, including the 21st Century Insurance Companies (collectively PAG).
Best also affirmed the ICR and debt rating of “bbb” on the $100 million of senior unsecured notes of 21st Century Insurance Group, an intermediate holding company.
Best has revised its ratings outlooks on the companies to stable from negative.
The rating actions are the result of PAG’s acquisition by Farmers Insurance Group, which, Best noted, “has provided a 100 percent quota share reinsurance agreement to the PAG members.
“The acquisition strengthens Farmers’ market share, broadens its geographic and product diversity and accelerates entry into the direct to consumer market.” Best also noted that, although there are potential integration risks, given the magnitude of the transaction,” it nonetheless “anticipates the overall operational impact will be manageable given Farmers’ diverse product offerings and previously successful acquisition performance.”
In addition, Best assigned an FSR of ‘A’ (Excellent) and an ICR of “a” to American International Insurance Company of Delaware, both with stable outlooks, and it has withdrawn the ratings of 21st Century Insurance Companies and AIG Personal Lines Group and assigned the FSRs a category of NR-5 (Not Formally Followed) and the ICRs an ‘nr’.”
Best summarized its rating g actions as follows:
The FSRs of ‘A’ (Excellent) and ICRs of “a” have been affirmed and the outlook has been revised to stable from negative for:
— 21st Century Casualty Company
— 21st Century Insurance Company
— 21st Century Insurance Company of the Southwest
— New Hampshire Indemnity Company, Inc.
— American International Pacific Insurance Company
— AIG Hawaii Insurance Company, Inc.
— AIG National Insurance Company, Inc.
— American Pacific Insurance Company, Inc.
— American International Insurance Company
— American International Insurance Company of California
— American International Insurance Company of New Jersey
— AIG Advantage Insurance Company
— AIG Centennial Insurance Company
— AIG Auto Insurance Company of New Jersey
— AIG Preferred Insurance Company
— AIG Premier Insurance Company
— AIG Indemnity Insurance Company
The ICR of “bbb” has been affirmed and the outlook has been revised to stable from negative for 21st Century Insurance Group
The following debt rating has been affirmed and the outlook revised to stable from negative: 21st Century Insurance Group – “bbb” on $100 million 5.9 percent senior unsecured notes, due 2013.
Source: A.M. Best – www.ambest.com
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