S & P: Alfa Mutual Insurance Co., affiliated credit rating lowered, stable
Standard & Poor’s lowered its counterparty credit and financial institutions
Force rating for all members of the Alabama-based Alfa Insurance Group (ALFA) to “AA-” from “AA”.
Standard & Poor’s also said it reaffirmed its “A-1 +” Commercial Paper rating on Alfa Corp. The outlook for these companies is stable.
“The ratings were reduced because the group of geographical
Concentration, which led the fourth consecutive year
insurance losses, primarily due to the exposure of the disaster ”
explains Standard & Poor’s Credit Analyst Polina Chernyak. “In addition, Alfa faces competitive market conditions, as it continues to be challenged by large national competitors.” These weaknesses are partly offset by the group’s position as leader of a line of personal insurance in Alabama, extremely strong capitalization and good investment results in a consistent manner.
Standard & Poor’s believes that Alfa reduces the volatility of returns
the property of their disaster losses. Alfa It is expected that its capital base extremely solid and strong operational
Performance, with a yield of 13 percent-17 percent in the years 2004 and 2005. It is also anticipated that, to curb the volatility of its merits by diversifying its geographic concentration and minimize risks.
Alfa is a leader in Alabama, the majority of its activities
generates private car and homeowners. In addition, Alfa presence of a leader in Alabama’s Farm common property, where he was captured nearly 80 percent of the market at the end of 2003.
His excellent track record of Customer Service has enabled more than 20 per cent share of Alabama’s and homeowners market personal auto insurance is the second action.
Alfa has historically generated strong operating results of the activity, but
Group underwriting performance to deteriorate in the years 2002 and 2003. The
Decrease the result of an Alfa vulnerability to disasters because of its high concentration of business in Alabama and its technology spending increases.
Standard & Poor’s is of the opinion, improve the operational performance is something that increases with tax rates and other measures to improve profitability.
But Alfa is the performance of delay, that some of his colleagues, given that trafficking of persons deprived of their car Carrier have significantly improved underwriting margins in recent years.
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