A.M. Best Upgrades Issuer Credit Ratings of Fireman’s Fund Insurance Companies

OLDWICK, N.J.--(BUSINESS WIRE)-- 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 (Fireman’s Fund), which includes Fireman’s Fund Insurance Company(Novato, CA) and its intercompany pool participants and reinsured affiliates. Additionally, A.M. Best has affirmed the ICR of “a” of Allianz of America Inc.(Delaware). Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and ICRs of “aa” of Fireman’s Fund’s parent company, Allianz Global Risks US Insurance Company(Allianz US) (Burbank CA) and its affiliates, AGCS Marine Insurance Company (Chicago, IL) and Allianz Underwriters Insurance Company(Burbank, CA). The outlook for all ratings is stable. (See below for a detailed list of the companies and ratings.)

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. The ratings further reflect Fireman’s Fund’s solid stand-alone capitalization and generally favorable operating performance over the current five-year period.

These positive rating factors are partially offset by 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. The outlook also recognizes A.M. Best’s 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.

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

<li class="bwlistitemmargb">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

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; and “Natural Catastrophe Stress Test Methodology.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2010 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Brian O’Larte, 908-439-2200, ext. 5138
Senior Financial Analyst
brian.olarte@ambest.com
or
Michelle Baurkot, 908-439-2200, ext. 5507
Assistant Vice President
michelle.baurkot@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Co.