A.M. Best Affirms Ratings of First Beacon Insurance Company
A.M. Best Co. has affirmed the financial strength rating of B++
(Good) and the issuer credit rating (ICR) of "bbb+”
of First Beacon Insurance Company (First Beacon) (Burlington,
VT).The outlook for both ratings is stable.
The ratings reflect First Beacon’s robust
capitalization, very low leverage measures, continued recent favorable
operating performance and the strategic role it serves as a captive
insurance company for its parent, Alcatel-Lucent (NYSE: ALU), primarily
for the U.S. exposures of the newly merged company.
These positive rating factors are offset in part by First Beacon’s
substantial variation in underwriting income and net income over the
past five years. Another offsetting rating factor is the concern over
the parent company’s long-term business
profile. First Beacon is an insurance company considered bankruptcy
remote from Alcatel-Lucent. Nonetheless, its baseline property and
casualty book of business volume is dependent in large part on the
economic success of Alcatel-Lucent and its affiliates and subsidiaries.
A.M. Best notes the strength of the management team, well-developed
plans to meet the continuing insurance needs of Alcatel-Lucent and the
maintenance of substantial levels of capital within the captive.
A.M. Best remains the leading rating agency of captive insurers rating a
wide variety of more than 200 captives in the United States and
throughout the world.
For current Best’s Ratings and independent
data on the captive and alternative insurance market, please visit www.ambest.com/captive.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit www.ambest.com.
