Best Affirms Fireman’s Fund Companies ‘A’ Ratings; Upgrades ICR

A.M. Best Co. has upgraded the issuer credit ratings (ICR) to “a+” from “a” and affirmed the financial strength rating (FSR) of ‘A’ (Excellent) of Fireman’s Fund Insurance Companies, which includes Novato, Calif.-based Fireman’s Fund Insurance Company and its intercompany pool participants and reinsured affiliates.

Best also affirmed the ICR of “a” of Allianz of America Inc. (Delaware), as well as the FSR of ‘A+’ (Superior) and ICRs of “aa” of Fireman’s Fund’s parent company, Allianz Global Risks US Insurance Company, which is based in Burbank Calif., and its affiliates, AGCS Marine Insurance Company (Chicago, IL) and Allianz Underwriters Insurance Company (Burbank, CA). The outlook for all ratings is stable.

The rating actions reflect “Fireman’s Fund’s strategic importance to the global insurance operations of its German-based ultimate parent, Allianz SE, operating as a key U.S. platform, as well as the explicit and implicit support that remains vital to the group’s current ratings,” best explained. The ratings “further reflect Fireman’s Fund’s solid stand-alone capitalization and generally favorable operating performance over the current five-year period.”

As offsetting factors Best cited “the group’s continued adverse loss reserve development associated with both recent accident years and historical asbestos and environmental reserves, which has strained underwriting performance in select years.”

Best added that the outlook also recognizes its expectation that the group will be able to generate sound operating results over the near term despite variable underwriting performance. Additionally, the group has benefited from substantial support via capital and reinsurance from Allianz SE, including a Keep Well agreement, which is essential to the group’s current and prospective capitalization, as measured by Best’s Capital Adequacy Ratio.

Best summarized the rating s actions as follows:

The ICRs have been upgraded to “a+” from “a” and the FSR of A (Excellent) has been affirmed for Fireman’s Fund Insurance Companies and its following intercompany pool participants and reinsured affiliates:
• Fireman’s Fund Insurance Company
• American Automobile Insurance Company
• National Surety Corporation
• The American Insurance Company
• American Standard Lloyd’s Insurance Company
• Associated Indemnity Corporation
• Chicago Insurance Company
• Fireman’s Fund County Mutual Insurance Company
• Fireman’s Fund Indemnity Corporation
• Fireman’s Fund Insurance Company of Hawaii, Inc.
• Fireman’s Fund Insurance Company of Louisiana
• Fireman’s Fund Insurance Company of Ohio
• Interstate Fire & Casualty Company
Source: A.M. Best