What’s New: In Brief (July 05, 2007)

A.M. Best Co. has affirmed the financial strength rating of A (excellent) of Royal Bank of Canada Insurance Company Ltd. (RBCI).
RBCI benefits from a very secure equity capital base, a broad geographical spread of risk, which is concomitant with a diverse product mix and ample liquidity, enhanced by the high quality of a prudently managed invested asset portfolio, A.M. Best reports.
Partially offsetting rating factors is the potential that additional future exposure in the form of additional reserves will develop over the next several years, stemming from the property/casualty catastrophic risk reinsurance portfolios, which RCBI exited in 2006; and modest returns generated on the investment portfolio an A.M. Best statement says.

A.M. Best Co. has downgraded the financial strength rating of AXA RE to A- (excellent) from A (excellent), with the outlook for the ratings shifting from stable to negative.
AXA Re sold its reinsurance business to Paris Re in December 2006, an A.M. Best statement says.
AXA Re transferred the vast majority of its reserves to Paris Re through a 100% quota share agreement, with AXA Re acting as a fronting company to Paris Re until the end of September 2007.
A.M. Best believes that AXA Res current risk-adjusted capitalization is strong and supports the ratings. AXA Re will be in complete run off during the fourth quarter of 2007, once the fronting agreement with Paris Re is to be fully terminated, the release says.
A.M. Best will closely monitor the level of capital from AXA Re and the commitment from AXA following the termination of the fronting agreement.