What’s New: In Brief (January 12, 2009)

A.M. Best Co. has revised the outlook of Peace Hills General Insurance Company to negative from stable and affirmed its financial strength rating of B+ (Good) and issuer credit rating of “bbb-.”
“The negative outlook is a result of Peace Hills’ weakening capitalization due primarily to its declining asset values and diminishing earnings,” A.M. Best said in a press release. “Additionally, the company is geographically concentrated in the province of Alberta, exposing it to the volatile automobile market in that province, as well as local competitive market pressures, severe weather-related risks and regulatory intervention.
“In addition, investment leverage is above-average, while returns have lagged behind industry averages.”
The ratings agency noted Peace Hills’ profitability has been better than the industry average, resulting in strong capital adequacy ratios.
“This was achieved through above-average underwriting income supplemented by steady investment income and capital gains.”
A.M. Best added that the company is taking action to reduce its investment risk and establish an enterprise risk management program, “which should provide long-term benefits.”

Ty R. Sagalow, formerly of American International Group (AIG), has joined the North America commercial marketing unit of Zurich as executive vice president and chief innovation officer.
Sagalow will oversee all of North America commercial’s strategic product development initiatives in the United States and Canada. He will have responsibility for the business division’s proposition development and marketing research departments.
Sagalow will be based in New York and will report to John Parker, chief marketing officer for North America Commercial.
With 25 years of experience in the property and casualty industry, Sagalow most recently served as president of AIG product development in New York.
While at AIG, he oversaw the development of numerous new insurance products, including directors and officers liability policies, cyber-risk insurance, identity theft and various management and professional liability products.