Best’s News & Research Service - July 20, 2009 11:46 AM (EDT)
A.M. Best Revises Outlooks for the Insurance Units of the Former AIG Personal Lines Group Due to Farmers Acquisition
OLDWICK, N.J. //BestWire// - A.M. Best Co. has affirmed the financial strength ratings (FSRs) of A (Excellent) and issuer credit ratings (ICRs) of “a” of the operating insurance units of the former AIG Personal Lines Group, including the 21st Century Insurance Companies (collectively PAG). In addition, the ICR and debt rating of “bbb” have been affirmed on the $100 million of senior unsecured notes of 21st Century Insurance Group (Woodland Hills, CA), an intermediate holding company. All rating outlooks have been revised to stable from negative. (See below for a detailed listing of the companies and ratings.)
The rating actions are the result of PAG’s acquisition by Farmers Insurance Group (Farmers) (Los Angeles, CA), which has provided a 100% quota share reinsurance agreement to the PAG members.
The acquisition strengthens Farmers’ market share, broadens its geographic and product diversity and accelerates entry into the direct to consumer market. Although there are potential integration risks, given the magnitude of the transaction, A.M. Best anticipates the overall operational impact will be manageable given Farmers’ diverse product offerings and previously successful acquisition performance.
In addition, A.M. Best has assigned an FSR of A (Excellent) and an ICR of “a” to American International Insurance Company of Delaware (Delaware). Both ratings have been assigned a stable outlook. Concurrently, A.M. Best has withdrawn the ratings of 21st Century Insurance Companies and AIG Personal Lines Group and assigned the FSRs a category NR-5 (Not Formally Followed) and the ICRs an “nr”.
The FSRs of A (Excellent) and ICRs of “a” have been affirmed and the outlook has been revised to stable from negative for:
- 21st Century Casualty Company
- 21st Century Insurance Company
- 21st Century Insurance Company of the Southwest
- New Hampshire Indemnity Company, Inc.
- American International Pacific Insurance Company
- AIG Hawaii Insurance Company, Inc.
- AIG National Insurance Company, Inc.
- American Pacific Insurance Company, Inc.
- American International Insurance Company
- American International Insurance Company of California
- American International Insurance Company of New Jersey
- AIG Advantage Insurance Company
- AIG Centennial Insurance Company
- AIG Auto Insurance Company of New Jersey
- AIG Preferred Insurance Company
- AIG Premier Insurance Company
- AIG Indemnity Insurance Company
The ICR of “bbb” has been affirmed and the outlook has been revised to stable from negative for 21st Century Insurance Group.
The following debt rating has been affirmed and the outlook revised to stable from negative:
21st Century Insurance Group
- “bbb” on USD 100 million 5.9% senior unsecured notes, due 2013
For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at http://www.ambest.com/ratings/methodology.