Folksamerica Reinsurance Company is one of the rare companies to see its rating upgraded in the current market. Rating agency A.M. Best Co. has lifted the New York-based reinsurer’s financial strength rating to A (excellent) from A- (excellent). The move comes as a result of Folksamerica’s improved level of stand-alone, risk-adjusted capitalization, and stronger earnings recently. The company is in a good position to capitalize on the hard reinsurance market. The rating is also based on the support of parent company OneBeacon Insurance Co., a subsidiary of White Mountains Insurance Group. However, A.M. Best points to adverse reserve development, for which the company had purchased cover in 2000. That cover is soon to run out, leading to some concerns about continued adverse development. French reinsurer SCOR S.A. did not fare so well, with rating agency Standard & Poor’s placing the company on Creditwatch negative. This applies to the A- counterparty credit and financial strength ratings of the reinsurer. “The CreditWatch placement follows SCOR’s disappointing absolute and relative first-quarter 2003 results, further indications of a weakened although still strong business position, and the potential Standard & Poor’s sees for reported capital to be materially affected by further reserve strengthening,” says S&P credit analyst Marcus Rivaldi. “This potential strengthening relates particularly to SCOR’s credit derivatives portfolio and its CRP subgroup (comprising Commercial Risk Reinsurance Co. Ltd. and Commercial Risk Re-Insurance Co.).” The rater will meet with the reinsurer to resolve its rating, but notes that if the company is downgraded, it will be by one or two notches.