A.M. Best Says Chubb Corporation's Financial Strength and Debt Ratings Unaffected by Fourth Quarter Charges.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 4, 2004 A.M. Best Co. has commented that the financial strength ratings of A++ (Superior) of The Chubb Corporation's (Chubb) (Warren, NJ) (NYSE NYSE See: New York Stock Exchange : CB) property/casualty subsidiaries, the existing "aa-" senior debt ratings of The Chubb Corporation and Chubb Executive Risk Inc., the "a+" ratings of the capital securities of Executive Risk Capital Trust and the AMB-1+ rating on the commercial paper issued by Chubb Capital Corporation are unaffected by the fourth quarter charges announced yesterday. The outlook for all ratings remains stable. These ratings were affirmed on December 8, 2003, in consideration of Chubb's enhanced subsidiary capitalization, improved 2003 core earnings and prospects for 2004. A.M. Best's views incorporated Chubb's exposure to discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: credit derivative Credit Derivative Privately held negotiable bilateral contracts that allow users to manage their exposure to credit risk. Credit derivatives are financial assets like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private business, potential surety bond surety bond An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. losses, future directors and officers claims--including those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the mutual fund industry--and challenges associated with asbestos and environmental liabilities. Accordingly, the $250 million asbestos reserve charge and the $96 million charge for the non-insurance business of Chubb Financial Solutions in the fourth quarter, as well as the $150 million of adverse loss development for the full year on accident years 2002 and prior for primarily professional liability, fell within A.M. Best's estimate of the potential risk associated with these areas. Chubb and its 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. continue to be favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. positioned and sufficiently well-capitalized to absorb these challenges. Chubb has a conservative operating philosophy, benefits from its long-standing producer relationships, global franchise and customer loyalty, and has sustainable competitive advantages within its specialty insurance and upscale personal lines businesses. These ratings also acknowledge Chubb's proven financial flexibility, disciplined capital management and prudent loss reserving and pricing practices. Chubb has conservatively managed its capital structure, holding company liquidity and financial leverage. However, leverage and holding company cash flow requirements have increased recently. Nevertheless, recent capital raising increased Chubb's liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. which, along with its earnings prospects in 2004, provides strong coverage of its holding company obligations. For a list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/. 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