A.M. Best Affirms Ratings for the Liberty Mutual Insurance Companies.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 7, 2002 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A+ (Superior) for Liberty Mutual Insurance Companies, Boston. As of September 27, 2001, the rating for Liberty Mutual, which applies to the 13 pool members, eight reinsured affiliates and two international affiliates, was placed under review due to uncertainty regarding the potential impact of the World Trade Center tragedy on its capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. . While Liberty Mutual has an estimated $300 million after-tax loss related to the WTC WTC World Trade Center, see there tragedy, it successfully completed the sale of both the asset management and the annuity and bank marketing businesses of Liberty Financial Companies, Inc., for over $2.1 billion in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). . This sale allowed the group's capitalization level to support the current rating by eliminating the risk associated with this business. The rating affirmation reflects Liberty Mutual's adequate capitalization, conservative balance sheet, improving underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. trends and successful risk mitigation and business diversification strategies. As the nation's largest workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. insurer, Liberty Mutual's franchise is further enhanced by its well-regarded service reputation, strong client relationships, high business retentions and a very effective, low-cost distribution network. In addition, Liberty Mutual's extensive unbundled service capabilities, risk management services and strategic alliances with managed care networks provide a significant competitive advantage and a superior market profile. Finally, Liberty Mutual maintains considerable financial flexibility through its access to capital markets that should only be enhanced by its mutual holding company structure. Offsetting these positive rating factors are Liberty Mutual's weak operating returns and negative cash flow position. While its capitalization is still supportive of the current rating, the surplus position has deteriorated considerably over the last few years, largely driven by adverse loss reserve development and unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on the group's investment portfolio. Over this same time period, operating returns have been below historical profitability levels. Given these negative trends, further significant adverse loss reserve development or continued subpar sub·par adj. 1. Not measuring up to traditional standards of performance, value, or production. 2. Below par in a hole, round, or game of golf. operating profitability will likely weaken capitalization and prompt a rating downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. . Accordingly, the rating outlook is negative. Additionally, A.M. Best has affirmed financial strength ratings of A+ (Superior) for Liberty Northwest Insurance Corporation, Portland, Oregon, and A (Excellent) for Liberty Life Assurance Company of Boston and Liberty Insurance Holdings, of Dover and Keene, New Hampshire Keene is a city in Cheshire County, New Hampshire, United States. The estimated population was 23,023 in 2005, according to the state Data Center [1] It is the county seat of Cheshire CountyGR6. , respectively. The rating for Liberty Insurance Holdings applies to its seven pool members and six reinsured affiliates. For a complete listing of Liberty Mutual Insurance Companies' property/casualty and life/health affiliates, please visit http://www.ambest.com/press/LibertyMutual.pdf. To access the rating supplement for Liberty Northwest, please visit http://www.ambest.com/press/LibertyNorthwest.pdf. To access the rating supplement for Liberty Insurance Holdings, please visit http://www.ambest.com/press/LibertyInsurance.pdf. To access the rating supplement for Liberty Life Assurance Company of Boston, please visit www.ambest.com/press/LibertyLife.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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