Rating agency A.M. Best announced Wednesday that it upgraded the financial strength ratings (FSR) of members of RSUI Group to “A+” (Superior), citing continued strong capitalization, excellent historical underwriting profitability and the benefits of being part of Alleghany Corporation.

Best’s ratings’ boosts from a prior level of “A” (Excellent) impacts RSUI Indemnity Company and its reinsured subsidiaries, Landmark American Insurance Company and Covington Specialty Insurance Company. Best also changed the outlook for the ratings to stable from positive, and upped issuer credit ratings (ICR) to “aa-” from “a+”.

In a separate announcement, the Oldwick, N.J.-based rating agency said it put a positive outlook on the “A” FSR and “a+” ICR of Alleghany’s Transatlantic Reinsurance Company (TransRe), and its subsidiaries, Fair American Insurance and Reinsurance Company, Fair American Select Insurance Company and Trans Re Zurich Ltd. Those ratings had previously had a stable outlook.

A.M. Best Europe–Rating Services Limited made the same outlook changes for the same FSR and ICE levels for TransRe London Limited.

In addition, A.M. Best has revised the outlook to positive from stable and affirmed the ICRs of “bbb+” and debt ratings of Alleghany Corporation and Transatlantic Holdings Inc.

Best said that TransRe’s positive outlook reflects a strong global business profile, solid operating results and robust risk management practices. In addition, TranRe’s affirmed ratings reflect its excellent risk-adjusted capitalization, diversified book of business and stabilized reserve position, Best said, noting that year-end 2013 results were at or near historic highs. Best attributed the record result to both disciplined underwriting and the relatively benign level of catastrophic events, also noting strong investment income despite a difficult investment environment for TransRe’s largely fixed income portfolio.

TransRe also benefits from the support and stability provided by Alleghany, Best said, noting that both organizations have benefitted from TransRe’s acquisition and integration into the Alleghany operations.

Partially offsetting these positive attributes are A.M. Best’s concerns regarding increasingly competitive reinsurance market conditions.

In the RSUI announcement, Best also noted the following actions on other Alleghany subsidiaries:

  • Affirming the FSR of A (Excellent) and the ICRs of “a” of Capitol Indemnity Corporation and its two subsidiaries, Platte River Insurance Company and Capitol Specialty Insurance Corporation, which operate under a pooling agreement, collectively referred to as Capitol Insurance Group. The outlook for these ratings is stable.
  • Affirming the FSR of A- (Excellent) and the ICR of “a-” of Pacific Compensation Insurance Company, with a stable outlook.

Best said the Pacific Comp ratings reflect the demonstrated support from Alleghany in the form of capital contributions and the potential for additional explicit support through intercompany reinsurance agreements.

Source: A.M. Best