Ratings Recap: Temple, Munich Re, ERGO, Ecclesiastical, Ansvar, Unipol, Paris Re

A.M. Best Co. has assigned an issuer credit rating (ICR) of “a+” and affirmed the financial strength rating (FSR) of ‘A’ (Excellent) of Canada’s Temple Insurance Company; has revised its outlook on the FSR to positive from negative, and equally assigned a positive outlook to the ICR. “The ratings and outlook reflect A.M. Best’ s view that Temple maintains excellent capitalization, has delivered a consistently favorable operating performance and benefits from its strategic affiliation with Munich Reinsurance Company of Canada and its ultimate parent, Munich Reinsurance Company (Munich Re) (Germany),” said the bulletin.

Standard & Poor’s Ratings Services has affirmed its ‘AA-‘ counterparty credit and insurer financial strength ratings on German global reinsurer Munich Reinsurance Co. and its related core entities, including those in the ERGO and Munich Re America subgroups -collectively Munich Re. S&P also affirmed the ‘A’ counterparty credit rating on German-based intermediate holding company ERGO Versicherungsgruppe AG (ERGO). The outlook on all entities is stable. “The ratings reflect Munich Re’s very strong competitive position, very strong capitalization, very strong financial flexibility, and strong enterprise risk management (ERM)”, stated S&P credit analyst Karin Clemens. These factors are partially offset by Munich Re’s operating performance, which although strong and improving, is not yet fully in line with the rating and the strategic challenge to further expand its competitive position.

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and the issuer credit rating (ICR) of “a” of the UK-based Ecclesiastical Insurance Office plc (EIO. Best also affirmed the rating of “bbb” on the £66,450,000 ($134,306,600) 8.625% non-cumulative irredeemable preference shares issued by EIO. The outlook for all ratings remains stable. “EIO’s consolidated risk-adjusted capitalization is likely to remain excellent in 2007 and 2008, supported by the retention of solid after-tax earnings,” said Best, adding that, in its opinion “capitalization is sufficient to withstand potential earnings volatility owing to the company’s relatively high exposure to equity investments (27 percent of total assets as at year-end 2006).”

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of “a-” of UK-based Ansvar Insurance Company Limited with a stable outlook. Best said it “believes Ansvar will maintain strong risk-adjusted capitalization in 2007 and 2008, supported by the retention of solid after-tax earnings. Capitalization is enhanced by a £0.5 million ($1 million) subordinated perpetual loan from its parent, Ecclesiastical Insurance Office plc (EIO). In addition, Ansvar benefits from the support of its parent’s main reinsurance program and a 22.5 percent quota share agreement with EIO that covers all classes of business underwritten.”

Standard & Poor’s Ratings Services announced that its counterparty credit and insurer financial strength ratings on the core operating companies of Italian insurer Unipol Gruppo Finanziario (UGF, insurer financial strength rating on core operating companies A-/Stable) are not affected by the capital restructuring announced by the group. S&P said it had “already factored into the ratings the payback of excess capital to UGF shareholders. As expected, the payback amount does not reduce the group’s capitalization to a level out of line with the ratings. The ratings on UGF are based on its strong competitive position in the Italian insurance market, its strong operating performance in property/casualty insurance, and its strong financial flexibility and capitalization.”

A.M. Best Co. commented that the issuer credit rating (ICR) of “bbb-” of Swiss-based PARIS RE Holdings Limited (PRHL), the financial strength ratings of ‘A-‘ (Excellent) and the ICRs of “a-” of PRHL’ s rated operational subsidiaries are unchanged following the announcement of a reduction of share capital of up to $400 million conditioned upon the issuance of subordinated debt for an equivalent amount forecasted early 2008.”