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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - DECEMBER 19, 2008 12:00 AM (EST)
A.M. Best Co. has removed from under review and affirmed several ratings, following the completion of the 2008 hurricane season. (See below for a detailed listing of the rated entities). No catastrophes occurred through the end of the season, which could have adversely impacted Florida Hurricane Catastrophe Fund's (FHCF) ability to fund its claims-paying capacity. Due to the recent considerable contraction in the credit markets, the FHCF announced in October a revision to its estimated claims-paying capacity, as a large portion of its capacity relies on potential bond issuances. These actions prompted A.M. Best to place the ratings under review on October 29, 2008, as the rated entities' catastrophe reinsurance programs rely significantly on the FHCF. However, as no catastrophe occurred, there was no adverse impact on the entities' risk-adjusted capitalization, based on a reduction in the potential coverage available from the FHCF. Therefore, A.M. Best is reverting back to the opinions it had on the entities regarding the financial strength rating (FSR), issuer credit rating (ICR) and outlooks, which it had prior to FHCF's announcement. However, A.M Best will continue to monitor the capacity of the FHCF given the evolving credit market conditions. This will be a critical component of A.M. Best's analysis of insurer's risk-adjusted capitalization, particularly with regards to the development of the 2009 reinsurance programs. Any potential gaps in coverage with regards to FHCF capacity will be incorporated into A.M. Best's analysis prior to start of the 2009 hurricane season.
The following rated entities' FSRs and ICRs have been affirmed:
- Allstate Floridian Insurance Group - FSR of B+ (Good) and ICR of "bbb-" with a negative outlook
- Argus Fire & Casualty Insurance Company - FSR of C- (Weak) and ICR of "ccc-" with a negative outlook
- Omega Insurance Company - FSR of B (Fair) and ICR of "bb" with a negative outlook
- Safeway Property Insurance Company - FSR of B (Fair) and ICR of "bb+" with a stable outlook
- Tower Hill Preferred Insurance Company - FSR of B (Fair) and ICR of "bb" with a negative outlook
- Tower Hill Prime Insurance Company - FSR of B (Fair) and ICR of "bb" with a negative outlook
- United Automobile Insurance Group - FSR of B- (Fair) and ICR of "bb-" with a stable outlook
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.