A.M. Best Co. has affirmed the financial strength rating of ‘B++’ (Good) and issuer credit rating of “bbb” of VICTORE Insurance Company (VIC) of Oklahoma City, both with stable outlooks. The ratings reflect VICTORE’s current “modest underwriting leverage, sound balance sheet liquidity and strong capitalization,” said Best. The company also “benefits from being purchased in 2009 by American Safety Insurance Holdings, Ltd. (ASI). Plans are to merge VICTORE with American Safety Casualty Insurance Company (ASIC) and have the business written through ASIC.” Best added that these positive rating factors are derived from the company’s “modest loss reserve leverage, conservative investment portfolio and minimal ceded reinsurance risk.” In addition the ratings acknowledge VICTORE’s niche expertise in the oil and gas plugging sector.” However, Best identified VICTORE’s “high underwriting expense structure, product concentration, limited geographical footprint and its somewhat limited business profile as it relates to its line of business and geographical concentration, which exposes VICTORE’s results to legislative and regulatory environmental changes,” as offsetting factors.
Standard & Poor’s Ratings Services has assigned its ‘BB+’ issue-level rating on the notes exposed to losses from earthquakes, including fires following, and sprinkler leakage in the covered territory to be issued by Merna Reinsurance II Ltd. The Company is a “special purpose insurer formed pursuant to the Bermuda Insurance Act, 1978, as amended, and is owned by a purpose trust,” S&P explained. The issuer was incorporated under the laws of Bermuda on Feb. 26, 2010. “Merna Re II will cover losses resulting from earthquakes in Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Tennessee, and Wisconsin. Merna Re II will cover losses in this territory that result from earthquakes, regardless of whether the earthquake epicenter occurs in the covered territory. State Farm Fire & Casualty Co. is the insurance company ceding the covered risks to Merna Re II.”
A.M. Best Co. has commented that the financial strength rating (FSR) of ‘A-‘ (Excellent) and issuer credit ratings (ICR) of “a-” of Hartford-based Utica Mutual Insurance Company and its affiliates are unchanged following the announcement of its planned acquisition of Founders Insurance Company, which is located in Des Plaines, Ill., and its affiliate, Founders Insurance Company of Michigan. Both the FSR of ‘A-‘ (Excellent) and ICR of “a-” of Founders are unchanged. All ratings have a stable outlook. Best said that, “although the planned acquisition of Founders will slightly reduce Utica Mutual’s risk-adjusted capitalization, Utica Mutual’s capitalization will continue to more than support its current rating level. In addition, the planned acquisition is expected to improve the group’s geographic footprint, product diversity, as well as offer cross selling opportunities to both Utica Mutual and Founders. The planned acquisition is expected to close sometime in second quarter 2010, pending regulatory approvals.”
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