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FOR IMMEDIATE RELEASE
LONDON - JANUARY 24, 2012 12:00 AM (EST)
A.M. Best Europe – Rating Services Limited has commented that the ratings of QBE Insurance Group Limited (QBE) (Australia) and its main insurance subsidiaries are unchanged following the market update issued by QBE on January 12, 2012, in which it revised its guidance for profit after tax for 2011 to a level 40%-50% lower than the USD 1.3 billion it reported in 2010.
Higher than expected catastrophe losses in the second half of the year combined with a volatile investment environment mean that earnings and year-end 2011 risk-adjusted capitalisation are likely to be lower than previously anticipated by A.M. Best. However, QBE’s management is taking actions to strengthen risk-adjusted capitalisation in 2012, including the reduction to the year-end 2011 dividend, and A.M. Best will closely monitor the impact of these actions and QBE’s prospective operating performance on risk-adjusted capitalisation and financial flexibility.
On 12 October 2011, A.M. Best Europe – Rating Services Limited affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a+” of QBE Insurance (Europe) Limited (United Kingdom), QBE Insurance (International) Limited (Australia) and QBE Reinsurance (Europe) Limited (Ireland). These companies are key operating subsidiaries of QBE, the non-operating holding company of the QBE group. At the same time, A.M. Best affirmed the ICR of “bbb+” and all debt ratings of QBE. Additionally, A.M. Best Co. upgraded the FSR to A (Excellent) from A- (Excellent) and the ICR to “a+” from “a-” for North Pointe Insurance Company (Harrisburg, PA) as well as affirmed the FSR of A (Excellent) and ICRs of “a+” of QBE Regional Insurance Group and its members. Concurrently, A.M. Best affirmed the FSR of A (Excellent) and ICRs of “a” of QBE Re Group – US and its members, as well as, NAU Country Insurance Company (Ramsey, MN) and Praetorian Insurance Company (Harrisburg, PA). The outlook for all ratings is stable.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; “Catastrophe Analysis in A.M. Best Ratings”; “Equity Credit for Hybrid Securities”; and “A.M. Best’s Ratings & the Treatment of Debt”. Methodologies can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.