What’s New: In Brief (December 23, 2008)

A.M. Best Co. has upgraded the financial strength rating of Temple Insurance Company to A+ (Superior) from A (Excellent), and revised its outlook on the company to positive.
“In A.M. Best’s opinion, the ratings and outlook reflect Temple’s excellent capitalization, consistently solid operating performance and benefits from its strategic affiliation with Munich Reinsurance Company of Canada and its ultimate parent, Munich Reinsurance Company (Germany),” A.M. Best said in a press release.
“Temple’s earnings continue to be solid as evidenced by favorable underwriting and investment income, as well as improved pure loss ratios.
“In addition, Temple maintains a conservative reserve philosophy, as evidenced by consistent redundancies on both an accident and calendar year basis.
“Temple has a solid business profile, focusing its book of business on liability and commercial property coverage, while also abiding by its plan to be a writer of niche type business.”

American International Group (AIG) Inc. didn’t get the best price for its Hartford Steam Boiler (HSB) Group, but just making a major sale is good for the struggling insurer, says an equity analyst quoted by A.M. Best.
Munich Re has agreed to acquire specialty insurer HSB Group from AIG for US$742 million in cash.
“It’s a good price,” said Donald Light, a Celent senior analyst quoted by A.M. Best’s news service BestDay. “What’s it really worth? Well, Hartford Steam Boiler is worth what anybody is willing to pay for it, and today that looks like about $700 million.
“It’s not the best price in the world, but what you have here is what in real estate used to be called a motivated seller.”
The federal government provided a US$85-billion bailout in September to prevent AIG from falling into bankruptcy. Last month, a revamped program of more than US$150 billion was instituted to keep the company afloat while it reorganizes and sells assets to repay loans.