(The following statement was released by the rating agency)
CHICAGO, May 31 (Fitch) Fitch Ratings has assigned its 'AA'
Strength (IFS) rating to ACE INA Overseas Insurance Company Ltd.
Bermuda domiciled, indirect wholly owned insurance subsidiary of
(ACE). The Rating Outlook is Stable. A complete list of all ACE
at the end of this release.
KEY RATING DRIVERS
The rating rationale is based on AIOIC's position within ACE's
structure and the integral role AIOIC plays in ACE's global risk
business operations, which under Fitch's group rating
methodology supports the
inclusion of AIOIC within the existing ACE group IFS rating of
Fitch's decision to use its group rating methodology rather than
approach is a function of 1) ACE's willingness to provide
support to AIOIC,
including an assessment of AIOIC's strategic importance to ACE,
between group members, and 2) ACE's ability to provide support
including an assessment that ACE's financial flexibility and
allows for shifting of resources throughout the organization as
consideration of any external barriers that may restrict
movement of capital and
resources between affiliates.
Fitch considers AIOIC to have a 'core' strategic importance to
ACE. AIOIC is a
key and integral part of the group's business and strategy. The
primary role is to act as an affiliate reinsurer with respect to
large account risk management business written by other ACE
including operations in Asia and Latin America. AIOIC has
history of success in supporting group objectives. Prospects
for future success
are consistent with that of other core ACE companies, and many
complements exist between ACE's core companies and AIOIC.
ACE's ratings reflect the company's continued strong operating
despite competitive market conditions, strong balance sheet
financial flexibility with moderate leverage, and diverse
sources of revenues
and earnings. ACE's operating performance is consistently
by low combined ratios with manageable catastrophe losses and
favorable loss reserve development and stable investment income.
Key rating triggers that may lead to an upgrade on a group,
include very strong operating performance with a combined ratio
under 85%, material stockholders' equity growth, and maintaining
a track record
of successful acquisition execution while managing financial
leverage to under
20% and run-rate leverage at or under 15%. Fitch expects
earnings-based interest and preferred dividend coverage to
remain at or above
15x, and for ACE's retention ratio (net premium written to gross
written) to increase over time to be more in line with
Key rating triggers that may lead to a downgrade on a group,
include a sustained material deterioration in operating
performance such that
the combined ratio is consistently less profitable at over 95%,
15%-20% reduction in stockholders' equity that is not recovered
in the near
term, and financial leverage consistently over 25%. Potential
acquisitions and the associated integration risks and company
could lead to pressure on the ratings, upward or downward,
depending on the
nature and size of the acquisition and corresponding integration
Additionally, the following negative rating triggers could cause
determine that AIOIC is no longer considered 'core' to ACE
Limited, and thus may
have an effect on Fitch's ability or willingness to group the
AIOIC rating and
result in a downgrade(s): Failure to maintain roughly 120% of
Solvency Capital Requirement model (BSCR) Target Capital Level,
trends pointing to a change in ACE's strategy or company profile
AIOIC's importance to ACE is lessened or ACE does not support
AIOIC as necessary
and as a result AIOIC is in a weaker financial or business
disposal, sale, or placement into run off of a core affiliate
will almost always
cause Fitch to re-evaluate its group assessment.
Fitch has assigned the following rating with a Stable Outlook:
ACE INA Overseas Insurance Company Ltd.
Fitch currently rates ACE Limited and related entities as
--Issuer Default Rating (IDR) 'AA-'.
ACE INA Holdings Inc.
--$500 million senior notes due 2014 'A+';
--$450 million senior notes due 2015 'A+';
--$700 million senior notes due 2015 'A+';
--$500 million senior notes due 2017 'A+';
--$300 million senior notes due 2018 'A+';
--$500 million senior notes due 2019 'A+';
--$475 million senior notes due 2023 'A+';
--$100 million senior debentures due 2029 'A+';
--$300 million senior notes due 2036 'A+';
--$475 million senior notes due 2043 'A+'.
ACE Capital Trust II
--$300 million capital securities due 2030 'A-'.
ACE American Insurance Company
ACE Bermuda Insurance Limited
ACE Fire Underwriters Ins. Company
ACE Insurance Company of the Midwest
ACE Property and Casualty Insurance Company
ACE Tempest Reinsurance Limited
Agri General Insurance Company
Atlantic Employers Insurance Company
Bankers Standard Fire & Marine Company
Bankers Standard Insurance Company
Illinois Union Insurance Company
Indemnity Insurance Company of North America
Insurance Company of North America
Pacific Employers Insurance Company
Westchester Fire Insurance Company
Westchester Surplus Lines Insurance Company
The Rating Outlook is Stable.
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
James B. Auden, CFA
Keith M. Buckley, CFA
Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549,
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Insurance Rating Methodology' (Jan. 11, 2013).
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