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A.M. Best Revises ICR Outlook to Negative for Members of QBE North America Insurance GroupOLDWICK, N.J. --(Business Wire)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a+" of the pooled and reinsured members of QBE North America Insurance Group (QBENA Group). These companies are key operating subsidiaries of QBE Insurance Group Limited (QBE) (Australia), the non-operating holding company of the QBE group of companies. The outlook for all ICRs has been revised to negative from stable. The outlook for all FSRs remains stable. (See below for a detailed listing of the companies and ratings.) The revised outlook follows the publication on November 12, 2012 of QBE's market update on its 2012 forecast results. A preliminary estimate of losses from Hurricane Sandy of between $350 million and $450 million, as well as an increase in projected prior year reserve strengthening for the full year to $380 million, has led the QBE group to revise its projected insurance profit margin for 2012 to 8% from 12%. As a result, the previously anticipated recovery in consolidated risk-adjusted capitalization to a strong level, following deterioration in 2011, is not expected to materialize by year-end 2012. A.M. Best will closely monitor the development in the group's risk-adjusted capitalization and performance over the next year. If consolidated risk-adjusted capitalization recovers to the level previously expected by A.M. Best during 2013, the negative outlook could rever back to stable. The absence of an improvement in consolidated risk-adjusted capitalization or a material decline in the operating performance of the QBE group or its U.S. subsidiaries could lead to negative rating actions. The FSR of A (Excellent) and ICRs of "a+" have been affirmed for the following pooled and reinsured members of QBE North America Insurance Group:
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding Universal BCAR"; "Understanding BCAR for Property/Casualty Insurers"; "Rating Members of Insurance Groups"; "Catastrophe Analysis in A.M. Best Ratings"; "Equity Credit for Hybrid Securities"; and "Insurance Holding Company and Debt Ratings." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. |
