A.M. Best Downgrades Financial Strength and Debt Ratings on Zurich Financial Services.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 6, 2002 A.M. Best Co. has downgraded the financial strength rating of Zurich Financial Services Zurich Financial Services Group is a major financial services group based in Zurich, Switzerland. Global operations North America The US consumer market is served primarily by Farmers Insurance Group the third largest personal lines property & casualty insurance (ZFS (1) (Zettabyte File System) A distributed file system from Sun that was added to OpenSolaris in 2005 and Solaris 10 in 2006. With support for 128 bits, compared to 64 for NTFS and other contemporary file systems, storage capacity is unlimited for all practical ) and its core operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. (see list below) to A (Excellent) from A+ (Superior). A.M. Best has also downgraded the ratings on debt issued or guaranteed by Zurich Insurance Company to "a" and "a-" from "a+" and "a" respectively and the debt issued by several subsidiaries within the group (see list below) to "bbb+" from "a-". All ratings have been placed under review with developing implications. (See detailed debt issues below.) These actions follow the confirmation of A.M. Best's concerns with the group's ability to restore earnings momentum to levels commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with a Superior-rated company and to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. its capital base. (See the March 22 press release when a negative outlook was assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. .) Reported half-year losses of USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 2 billion and the need to strengthen non-life In the physical sciences, non-life is an umbrella term set to distinguish or characterize those inanimate chemical precursors found in the primeval soup of the early years of planetary evolution from which life, theoretically, evolved or came into existence. insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. reserves will significantly erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. the overall group's risk-based adjusted capital. A.M. Best is currently discussing with management a series of proposed measures, including raising up to USD 2.5 billion of new equity, divesting non core operations and cutting its equity exposure to 10%. Resolution of the under-review status will be predicated on the outcome of the proposed capital raising and A.M. Best's view of the group's ability to complete the proposed re-structuring in a timely manner. A.M. Best is currently reviewing the core status of group subsidiaries following the announcement of the revised strategy. The financial strength ratings of the following companies have been downgraded to A (Excellent) from A+ (Superior) and placed under review with developing implications:
- Zurich Financial Services Group
- Foremost Corporation Group
- Farmers Insurance Group
The A (Excellent) financial strength ratings for the following
companies have been placed under review with developing implications:
- Centre Solutions (Bermuda) Ltd
- Zurich International (Bermuda) Ltd
- Zurich Specialties London Ltd
The following debt ratings have been downgraded and placed under
review with developing implications:
Zurich Insurance Company--
-- "a" rating on CHF1 billion 3.875% senior notes, due 2011
Zurich Finance (USA), Inc.
(guaranteed by Zurich Insurance Company)--
-- "a" rating on USD 300 million 6% senior notes, due 2003
-- "a" rating on CHF 300 million 3.5% senior notes, due 2008
-- "a" rating on USD 150 million 4.75% senior notes, due 2003
-- "a" rating on CHF 500 million 2.75% senior notes, due 2006
Zurich Capital Trust I
(guaranteed by Zurich Insurance Company)--
-- "a-" rating on USD 1,031 million 8.376% Capital Securities, due
2037 (issued 1997)
Zurich Financial Services Inc.--
-- "a-" rating on CHF 600 million market index-linked equity
securities (MILES), due 2005
Zurich Financial Services (Jersey) Ltd
(backed by subordinated support agreement
from Zurich Financial Services)--
-- "bbb+" rating on EUR 300 million 7.125% perpetual subordinated
non-cumulative preferred shares
Zurich RegCaPS Funding Trust I--
-- "bbb+" rating on USD 200 million trust capital securities, due 2031
Zurich RegCaPS Funding Trust II--
-- "bbb+" rating on USD 150 million trust capital securities, due 2031
Zurich RegCaPS Funding Trust III--
-- "bbb+" rating on USD 225 million trust capital securities, due 2031
Zurich RegCaPS Funding Trust IV--
-- "bbb+" rating on USD 125 million trust capital securities, due 2031
Zurich RegCaPS Funding Trust V--
-- "bbb+" rating on USD 200 million trust capital securities, due 2031
Zurich RegCaPS Funding Trust VI--
-- "bbb+" rating on USD 225 million trust capital securities, due 2031
Farmers Group Capital
(guaranteed by Farmers Group, Inc.)--
-- "bbb+" rating on USD 410 million 8.45% quarterly income preferred
securities (QUIPS), due 2025
Farmers Group Capital II
(guaranteed by Farmers Group, Inc.)--
-- "bbb+" rating on USD 90 million 8.25% quarterly income preferred
securities (QUIPS), due 2025
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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