Ratings Recap: Allied World Re, Computer, FGIC

Standard & Poor’s Ratings Services has assigned its ‘A-‘ counterparty credit and financial strength ratings to the recently acquired Allied World Reinsurance Co. (Allied World Re), a wholly owned, New Jersey-domiciled subsidiary of Bermuda-based Allied World Assurance Co. Holdings Ltd., with a stable outlook. “The ratings assignment on Allied World Re reflects our view that this entity is a core member of the Allied World group of companies,” said S&P credit analyst Dennis Sugrue. “We expect that Allied World Re will become Allied World’s main vehicle in the U.S. for the underwriting of U.S.-based reinsurance risks.” (See related article in National section).

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit rating (ICR) of “a” of Providence RI-based Computer Insurance Company, both with a stable outlook “The ratings reflect Computer Insurance Company’s outstanding profitability, excellent overall capitalization and management’s specialty underwriting expertise within its captive niche market,” said Best. The ratings also acknowledge the advantages derived from the company’s affiliation with Hewlett-Packard Financial Services and the synergies gained from Computer Insurance Company’s effective low-cost distribution platform, as well as preferential access to its insureds via the customer network of its ultimate parent, Hewlett-Packard Company.

Fitch Ratings has downgraded the following ratings on FGIC Corporation and its financial guaranty insurance subsidiaries Financial Guaranty Insurance Company (FGIC) and FGIC UK Ltd. as follows: FGIC, FGIC UK Ltd.–Insurer financial strength (IFS) to ‘BBB’ from ‘AA’. FGIC Corp.–Long-term Issuer to ‘BB’ from ‘A’; –$325 million of 6 percent senior notes due Jan. 15, 2034 ‘BB’ from ‘A’. Fitch has also removed the affected ratings from Rating Watch Negative, where they were originally placed on Dec. 17, 2007. The outlook on the ratings, however, remains negative. “The downgrade on FGIC is based on Fitch’s updated assessment of the company’s capital position, a review by Fitch of FGIC’s updated business plan, consideration of various qualitative ratings factors, and an update on Fitch’s current views of U.S. subprime related risks,” said Fitch