Ratings Action on Assurant - Analyst Blog

Rating agency A.M. Best Co. has affirmed the financial strength ratings (FSR) and issuer credit ratings (ICR) of the property and casualty (P&C) and life and health insurance subsidiaries of Assurant Inc. (AIZ). Additionally, A.M. Best has affirmed the issuer credit ratings of "bbb" and debt ratings of Assurant.

Along with affirming the ratings of the parent, A.M. Best has also upgraded the FSR of four of its operating subsidiaries to "A" from "A-" and ICRs to "a" from "a-" with a stable outlook for all. The four subsidiaries are American Reliable Insurance Company, Voyager Indemnity Insurance Company, Reliable Lloyds Insurance Company and Caribbean American Property Insurance Company.

A.M. Best acknowledges Assurant’s diverse product and distribution platform, established presence in various niche markets, adequate risk-adjusted capitalization, solid operating earnings, adequate interest coverage ratio of over 10.0X and sufficient financial flexibility.

Negatives include an ongoing U.S. SEC investigation that has adversely affected the company’s credit profile. In July 2009, Standard and Poor’s lowered the counterparty credit ratings and financial strength ratings on two of Assurant’s domestic operating insurance subsidiaries to "A-" from "A."

Also, the company’s continued dependence on third-party reinsurance and significant growth in specialty property (both organically and through acquisitions) in conjunction with an increase in net retention associated with its property catastrophe (CAT) treaty in recent years, expose its results to a greater degree of variability over the near term.
Read the full analyst report on "AIZ"
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