A.M. Best Affirms Ratings of Allianz Insurance Group and Fireman's Fund.OLDWICK, N.J. -- 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 ratings of A (Excellent) of Allianz Insurance Group (Allianz), which consists of Allianz Global Risks US Insurance Company and its wholly-owned subsidiary, Allianz Underwriters Insurance Company (Allianz Underwriters). The rating outlook for Allianz is stable. All companies listed above are located in Burbank, CA. A.M. Best has also affirmed the financial strength ratings of A (Excellent) of Fireman's Fund Insurance Company Fireman's Fund Insurance Company is a Novato, California-based insurance company owned by Allianz SE of Germany. It was founded June 18 1863 and issued its first policy to Walter Hawxhurst covering one half interest in 1,000 kegs of Boston syrup for a premium of $12. (Fireman's Fund) (Novato, CA) and its intercompany pool participants and reinsured affiliates. The rating outlook is negative. Allianz's ratings reflect the group's adequate stand-alone 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. , as well as the demonstrated parental support provided by its ultimate parent, Allianz A.G. (Munich, Germany). The ratings also take into consideration the group's solid business franchise and improved current and prospective earnings capabilities in its core industrial risk market. Somewhat offsetting these positive rating factors are the group's historically poor 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. performance and diminished stand-alone risk-adjusted capital position, notwithstanding the advances gained in 2003. While A.M. Best has taken into account the assessment of capitalization, a sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. portion of Allianz's surplus is in the
form of its equity stake in Fireman's Fund; thus, subjecting
Allianz's capital to even greater variability as it relates to
Fireman's Fund's turnaround TurnaroundA situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. and the continuation of its parental support. Nevertheless, continued support from Allianz A.G., along with improved market conditions, underwriting processes and initiatives implemented in recent years are expected to enable the group to generate an acceptable rate of return on revenue and capital, thus sustaining its strategic importance within the Allianz A.G. Group. The Fireman's Fund ratings reflect its strategic importance within the Allianz A.G. Group. This has been demonstrated in recent years by the explicit financial support provided by Allianz A.G. in the form of two Keep Well Agreements, one for pre-2003 accident year loss reserve development and one for the 2003 accident year. Given the sizable reserve additions and challenges faced by Fireman's Fund in recent years, this parental support and commitment is paramount to its current and prospective ratings. These ratings also recognize the significant improvement in underwriting and operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before during 2003, which, when combined with capital gains and various statutory accounting adjustments, served to increase surplus by 25% last year. Nonetheless, there remains some uncertainty regarding the ultimate success of the group's turnaround and sustainability of current earnings, as well as the recent change in leadership caused by the resignation of its president and chief executive officer in May 2004. Any material and negative deviation DEVIATION, insurance, contracts. A voluntary departure, without necessity, or any reasonable cause, from the regular and usual course of the voyage insured. 2. from Fireman's Fund's planned growth in earnings or any curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. in parental support will likely result in a downgrading downgrading A reduction in the quality rating of a security issue, generally a bond. A downgrading may occur for various reasons including a period of losses, or increased debt service required by restructuring a firm's capital to include more debt and less of the ratings. The financial strength ratings of A (Excellent) have been affirmed with a stable outlook for Allianz Insurance Group and its following subsidiaries: --Allianz Global Risks US Insurance Company --Allianz Underwriters Insurance Company The financial strength ratings of A (Excellent) have been affirmed with a negative outlook for Fireman's Fund Insurance Company and its following intercompany pool participants and reinsured affiliates: --American Insurance Company --National Surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act. surety n. Corporation --Interstate Fire & Casualty Company --American Automobile Insurance Company --Chicago Insurance Company --Associated Indemnity Corporation --Interstate Indemnity Company --Fireman's Fund Insurance Company of Ohio --American Standard Lloyd's Insurance Company --Fireman's Fund County Mutual Ins Co --Fireman's Fund Indemnity Corporation --Fireman's Fund Insurance Co of Hawaii Inc --Fireman's Fund Insurance Company of Georgia --Fireman's Fund Insurance Company of Louisiana CODE, OF LOUISIANA. In 1822, Peter Derbigny, Edward Livingston, and Moreau Lislet, were selected by the legislature to revise and amend the civil code, and to add to it such laws still in force as were not included therein. --Fireman's Fund Insurance Company of Missouri --Midway Insurance Company of Illinois --Fireman's Fund Insurance Company of Wisconsin 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. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion