Standard & Poor’s lowered its counterparty credit and financial strength ratings on Boston-based Liberty Mutual Insurance Co. and related entities to “A” from “A+” and removed them from credit watch.
In addition, the rating on Liberty Mutual’s surplus notes was lowered to “BBB+” from “A” and the “A-1” commercial paper rating was affirmed. The outlook is negative.
The company’s deteriorating capital position, weak operating results and reserve adequacy concerns accounted for the cut, according to S&P’s analyst John Iten.
Liberty Mutual’s capital adequacy is expected to improve in 2003. Underwriting results should benefit from the improved pricing environment in virtually all lines in 2003, and into 2004. S&P’s expects that the statutory combined ratio will fall well below last year’s ratio of 108 percent.
Improved earnings should bring capitalization back to a level more supportive of the ratings; however, if earnings expectations are not met and surplus does not improve as expected, the company would be vulnerable to another downgrade.
Was this article valuable?
Here are more articles you may enjoy.
State Farm Agrees to $15M Settlement for Underpaid Vehicle Claims 
Viewpoint: Japan’s $550B Bet on America—What it Means for the US Insurance Market 
Amish Mother and 6 Children Killed in Explosion and Fire at Pennsylvania Home 
State Farm Paid a ‘Hail’ of a Lot of Claims in 2025 From This Issue
