Chubb Atlantic’s ratings recognize its solid risk-adjusted capitalization and the implicit and explicit support provided by Chubb Corp. This financial support is evidenced by the capital contributions Chubb Corp. has made in recent years to support Chubb Atlantic’s operations, as well as the business of Chubb Atlantic’s subsidiary, Chubb do Brasil Companhia de Seguros. Furthermore, Chubb Atlantic is the beneficiary of sizable irrevocable letters of credit issued by banks on behalf of Chubb Corp.The ratings also acknowledge Chubb Atlantic’s strategic importance within the Chubb Group, including its quota share reinsurance assumed from affiliates. These positive rating factors are partially offset by the volatility in Chubb Atlantic’s underwriting performance in prior years, largely due to adverse loss reserve development. Chubb Corp.’s debt-to-tangible capital ratio is maintained at a modest 20% as of December 31, 2012. Despite the company’s ongoing share repurchase program, liquid assets at the holding company are expected to be maintained at a level more than sufficient to cover annual holding company expenses. The FSR of A++ (Superior) and the ICRs of “aa+” have been affirmed for the following property/casualty subsidiaries of The Chubb Corporation:
- Federal Insurance Company
- Chubb Custom Insurance Company
- Chubb Indemnity Insurance Company
- Chubb Insurance Company of Australia Limited
- Chubb Insurance Company of Europe SE
- Chubb Insurance Company of Canada
- Chubb National Insurance Company
- Executive Risk Indemnity Inc.
- Executive Risk Specialty Insurance Company
- Great Northern Insurance Company
- Pacific Indemnity Company
- Vigilant Insurance Company
- Chubb Insurance Company of New Jersey
- Chubb Lloyds Insurance Company of Texas
- Northwestern Pacific Indemnity Company
- Texas Pacific Indemnity Company
- Chubb Atlantic Indemnity Ltd.
The Chubb Corporation—-- “aa-” on $600 million 6.5% senior unsecured notes, due 2038 -- “aa-” on $600 million 5.75% senior unsecured notes, due 2018 -- “aa-” on $800 million 6.0% senior unsecured notes, due 2037 -- “aa-” on $275 million 5.2% senior unsecured notes, due 2013 -- “aa-” on $200 million 6.8% senior unsecured debentures, due 2031 -- “aa-” on $100 million 6.6% senior unsecured debentures, due 2018 -- “a” on $1 billion 6.375% junior subordinated debentures, due 2067 The following debt rating has been affirmed: The Chubb Corporation— -- AMB-1+ on commercial paper The following indicative ratings have been affirmed for securities under the shelf registration: The Chubb Corporation— -- “aa-” on senior unsecured debt -- “a+” on subordinated debt -- “a+” on preferred securities -- “a” on preferred stock The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Rating Natural Catastrophe Bonds”; “Analyzing Commercial Paper Programs”; “Catastrophe Analysis in A.M. Best Ratings”; “Insurance Holding Company and Debt Ratings”; “Equity Credit for Hybrid Securities”; “The Treatment of Terrorism Risk in the Rating Evaluation”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding BCAR for Canadian Property/Casualty Insurers”; “Understanding Universal BCAR”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.