73 Insurers Downgraded In Weiss Review

NU Online News Service, March 5, 9:20 a.m. EST?In its quarterly review of more than 2,200 property and casualty U.S. insurers, Weiss Ratings Inc. has downgraded 73 companies and upgraded two, while keeping the same ratings for the majority of carriers studied.

The review results were based on data from the end of the third quarter in 2002. Weiss will conduct its annual review, which will examine insurance companies' 2002 year-end figures, in May.

"Companies are seeing results from increasing premiums they have been charging. They had an $11 billion profit in the first nine months of 2002," said Stephanie Eakins, a financial analyst at Weiss Ratings in Palm Beach Gardens, Fla. "But 32 percent of U.S. p-c insurers still lost money in the first nine months of last year."

Among the insurers that suffered big downgrades was Associates Insurance Company, based in Irving, Texas, and a member of Citigroup Inc. In the Weiss review, the company's rating was lowered to "B" (Good) from "A-plus" (Excellent) because of significant decreases in capital and surplus during the 2002 third quarter, Ms. Eakins said.

Gerling Global Reinsurance Corporation of America in New York also saw its rating fall by more than one notch--the company was downgraded to "C" (Fair) from "B-minus" (Good) due to a significant decline in capital since year-end 2001, according to Weiss Ratings.

Other companies with significant ratings downgrades include Connecticut Medical Insurance Company in Glastonbury, Conn.; Sterling Casualty Insurance Company in Newport Beach, Calif.; and Washington Casualty Company based in Bellevue, Wash.

On the other side, the two companies that improved their ratings were Waukegan, Ill.-based Statewide Insurance Company and Rapid City, S.D.-based Sun Surety Company.