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Insurance ratings actions: Moody's, S&P act on American Family Mutual

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Insurance ratings actions: Moody's, S&P act on American Family Mutual

S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5 p.m. ET. Actions after 5 p.m. ET will be included in the following day's roundup.

U.S. and Canada

Kroll Bond Rating Agency assigned the A- insurance financial strength rating to Rock Ridge Insurance Co., a subsidiary of Clear Blue Specialty Insurance Co.

The agency also affirmed the BBB- issuer rating of Clear Blue Financial Holdings LLC and the A- insurance financial strength ratings of Clear Blue Specialty Insurance and Clear Blue Insurance Co.

The outlook for all ratings is stable.

The ratings reflect Clear Blue Specialty Insurance's and Clear Blue Insurance's sound capitalization on a combined basis, conservative investment portfolio, lack of underwriting risk as a pure fronting specialist and reasonable underwriting leverage.

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Moody's assigned the A1 insurance financial strength rating to American Family Mutual Insurance Co. SI, with a stable outlook.

The rating recognizes the company's established personal lines franchise in the Midwest U.S. It also takes into account the company's presence throughout the country, driven by its active acquisition strategy, a sound balance sheet and a high-quality fixed income portfolio.

S&P Global Ratings also assigned the A issuer credit rating and the A financial strength rating to American Family. The outlook is stable.

In assigning the ratings, the agency took into account the company's strong market position in personal lines, diversified earnings stream and strong capitalization, countered by elevated exposure to natural catastrophe risk and acquisition execution risk.

The stable outlook reflects S&P Global Ratings' expectation that American Family will continue to have excellent capital adequacy with a buffer, further improve its underwriting performance in the property and casualty operations, successfully leverage recent acquisitions and generate stable earnings from its life business.

Europe

Moody's withdrew the Aa3 insurance financial strength rating and stable outlook of Scottish Amicable Insurance Fund, a fully owned subsidiary of Prudential Assurance Co. Ltd. and the main with-profit insurance fund of M&G PLC.

The agency said the withdrawal was due to its own business reasons.

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S&P Global Ratings withdrew the ratings of Axa Corporate Solutions Assurances and Catlin Insurance Co. Ltd., as the two entities no longer exist after their merger with XL Insurance Co. SE and XL Bermuda Ltd, respectively.

The agency also affirmed the AA- long-term insurer financial strength and issuer credit ratings of Axa SA's core subsidiaries. The outlook is stable, reflecting the agency's view that the combined profitability of Axa and XL will grow stronger and the integration between the two companies will be smooth.

The AA- ratings of Axa's core operating subsidiaries recognize the group's prominent business positions across large insurance markets and lines of business.

Middle East and Africa

A.M. Best downgraded the financial strength rating to B++ from A- and the long-term issuer credit rating to "bbb+" from "a-" of Qatar General Insurance & Reinsurance Co. QPSC. The outlook of the financial strength rating was revised to stable from negative, while the outlook of the long-term issuer credit rating remains negative.

The ratings reflect the company's very strong balance sheet, strong operating performance, limited business profile and appropriate enterprise risk management.

The agency downgraded the ratings after the company's risk-adjusted capitalization deteriorated to a very strong level from a strongest level, as measured by Best's Capital Adequacy Ratio. The company's available capital decreased after it experienced operating losses from 2017 to 2019, resulting in the deterioration of its risk-adjusted capitalization.

Asia-Pacific

Fitch Ratings affirmed the A+ insurer financial strength rating and A issuer default rating of Meiji Yasuda Life Insurance Co. The outlook is stable.

The affirmation recognizes the company's favorable business profile, very strong capitalization and financial performance, and strong asset and liability management, the agency said.

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Fitch affirmed the A issuer default ratings of China Taiping Insurance Group Ltd., China Taiping Insurance Group (HK) Co. Ltd. and China Taiping Insurance Holdings Co. Ltd.

Fitch also affirmed the A+ insurer financial strength ratings of Taiping Life Insurance Co. Ltd. and the A insurer financial strength rating of Taiping Reinsurance Co. Ltd.

The outlook on all ratings is stable.

The affirmation reflects the group's strong financial performance, favorable business profile and sustained, strong risk-based capitalization amid growing asset risk. The group's issuer default rating benefits from a one-notch uplift from its stand-alone credit profile as Fitch expects the group to secure support from China's Ministry of Finance in times of stress.

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Moody's placed on review for downgrade the A1 insurance financial strength rating of Hanwha Life Insurance Co. Ltd. and the A2 insurance financial strength rating of Hanwha General Insurance Co. Ltd. The previous outlook on the entities was stable.

The review for downgrade reflects Hanwha Life's weakening credit profile due to lower profitability and pressure on capitalization from lower interest rates. Hanwha Life might find it difficult to improve its profitability as low interest rates continue in a weakening economy, the agency said. The new coronavirus outbreak also exerts downward pressure.

Moody's said the review for downgrade for Hanwha General takes into account the company's weakening profitability and capitalization, as well as the weakening credit profile of its parent, Hanwha Life.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

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