S&P Lowers HIH Insurance to 'BBB-'; Still Watch Neg.Business Editors MELBOURNE, Australia--(BUSINESS WIRE)--Standard & Poor's Feb. 26, 2001--Standard & Poor's today lowered its insurer financial strength and counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit ratings on the core operating entities of HIH Insurance HIH Insurance was Australia's second largest insurance company, which was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered be the largest corporate collapse in Australia's history, with liquidators estimating that HIH's losses totalled up to $5. Ltd. (HIH HIH abbr. Her (or His) Imperial Highness -- comprising HIH Casualty and General Insurance Ltd., and CIC CIC circulating immune complexes. CIC Circulating immune complexes. See Immune complexes. Insurance Ltd.) to triple-'B'-minus from triple-'B'-plus. The ratings remain on CreditWatch with negative implications, where they were placed on Sept. 13, 2000. The ratings action follows HIH's disclosure to the market that a current review of claims estimates, asset valuations, and business restructuring may have a material impact on the interim loss to Dec. 31, 2000. This clarification follows HIH's Dec. 15, 2000, disclosure of a likely operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for this period, and recent market speculation on the magnitude of the loss. Although HIH has not yet quantified the loss (it expects to report its interim result on March 16, 2001), Standard & Poor's believes that the loss will be outside the tolerance of the triple-'B'-plus/Watch Neg/-- rating assigned to HIH in November 2000. Although the realization of such a loss will have a detrimental det·ri·men·tal adj. Causing damage or harm; injurious. det  ri·men impact on the capital position of the company in the short
term, Standard & Poor's believes a significant proportion of
the loss is attributable to once-off restructuring items and the
treatment of intangible items. As such, the outlook for the
profitability of the ongoing operations is more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. in the medium term. The ratings remain on CreditWatch negative pending finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of the amount and composition of the half-year result, the outcome of the strategic review currently underway, and the extent to which the strategic review results in a supportive capital position. The single-'A'-minus/Stable/-- ratings assigned to HIH's New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. operations, HIH Casualty and General Insurance (N.Z.) Ltd., are unchanged, reflecting the strong stand-alone financial structure of HIHNZ, very good operating performance, solid market position in broker-distributed commercial lines business, and implementation of a legal structure to protect the company's strong 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. , Standard & Poor's said. ---CreditWire
Ratings lowered, remain on CreditWatch with negative implications
To From
HIH Insurance Ltd. Not Rated
HIH Casualty and General Insurance Ltd.
Insurer financial strength rating
BBB-/Watch Neg BBB+/Watch Neg
Counterparty credit rating BBB-/Watch Neg/-- BBB+/Watch Neg/--
Euro floating-rate subordinated bonds
BB/Watch Neg BBB-/Watch Neg
CIC Insurance Ltd.
Insurer financial strength rating
BBB-/Watch Neg BBB+/Watch Neg
Counterparty credit rating BBB-/Watch Neg/-- BBB+/Watch Neg/--
FAI General Insurance Co. Ltd.
Insurer financial strength rating
BBB-/Watch Neg BBB+/Watch Neg
Counterparty credit rating BBB-/Watch Neg/-- BBB+/Watch Neg/--
HIH Insurance (Asia) Ltd.
Insurer financial strength rating
BBB-/Watch Neg BBB+/Watch Neg
Counterparty credit rating BBB-/Watch Neg/-- BBB+/Watch Neg/--
HIH WorkAble Ltd.
Insurer financial strength rating
BBB-/Watch Neg BBB+/Watch Neg
Counterparty credit rating BBB-/Watch Neg/-- BBB+/Watch Neg/--
RATINGS UNCHANGED
HIH Casualty and General Insurance (N.Z.) Ltd.
Insurer financial strength rating
A-
Counterparty credit rating A-/Stable/--
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