Ratings Recap: Euler Hermes, Ascot, Tokio Marine Retakaful, Toa Re

Standard & Poor’s Ratings Services has raised its long-term counterparty and insurer financial strength ratings on U.K.-based surety insurer Euler Hermes Guarantee PLC to ‘AA-‘ from ‘A’ and assigned a stable outlook. “The upgrade reflects the provision of an unconditional guarantee to the company by Euler Hermes U.K. PLC, a core entity of French credit insurance group Euler Hermes,” explained S&P credit analyst Ali Karakuyu.

Standard & Poor’s Ratings Services has withdrawn its ‘AA+’ long-term insurer financial strength rating on London-based Ascot Corporate Name Ltd. (ACNL), “following today’s announcement of the cancellation of the guarantee provided by U.S.-based American Home Assurance Co. (AA+/Stable/–), a member of American International Group Inc. (AIG; AA/Stable/A-1+),” said the bulletin. S&P also noted that “cancellation of the guarantee is effective from 30 days after today’s notification of cancellation in the ‘Wall Street Journal. AIG’s management has decided to terminate the guarantee in an effort to optimize capital efficiency and simplify AIG’s structure.” In addition S&P said it had had to withdrawn the rating as it cannot “provide an insurer financial strength rating to a Lloyd’s capital provider (Lloyd’s is rated A+/Stable) in the absence of an explicit guarantee from another rated entity.” However, S&P pointed out that, as it owns 99 percent of the ACNL’s capital, it “remains committed to Ascot Underwriting – Syndicate 1414.”

Standard & Poor’s Ratings Services has assigned its ‘AA’ insurer financial strength rating to Singapore-based Tokio Marine Retakaful Pte. Ltd. (TMRt), reflecting the guarantee provided by Japan’s Tokio Marine & Nichido Fire Insurance Co. Ltd. (rated- ‘AA/Stable/A-1+’) to pay TMRt’s insurance claims-related obligations. The outlook on the rating is stable. S&P said the guarantee provided by TMNF meets its guarantee criteria, indicating that the rating agency therefore “expects TMNF to ensure that all valid claims made by TMRt policyholders will be honored. The rating on TMRt will move in tandem with the rating on TMNF as a consequence of the guarantee.”

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A+’ (Superior) and the issuer credit rating (ICR) of “aa-” for Japan’s Toa Reinsurance Company, Limited, and has revised both ratings from negative to stable. Best also affirmed the FSR of ‘A ‘(Excellent) and the ICR of “a” of The Toa Reinsurance Company of America, headquartered in Morristown, NJ, and also revised the out look on these ratings to stable from negative. “These rating actions reflect Toa Re’s improved underwriting performance in fiscal year 2006 and the first half of 2007, superior risk-adjusted capitalization and solid market presence with diversified revenue sources,” said Best.

Source: A.M. Best, S&P