Insurers’ Credit Slide Appears to Have Stopped
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The credit ratings of two earthquake-rocked subsidiaries of Woodland Hills-based 20th Century Industries--20th Century Insurance Co. and 21st Century Casualty Co.--have stopped their downward slide, at least for now, according to Standard & Poor’s Corp., the New York rating firm.
S&P; has given a B claims-paying ability rating to 20th Century Insurance Co. and 21st Century Casualty Co., and a CCC credit assessment rating to 20th Century Industries. These ratings are likely to hold for now because S&P; has removed the company from negative Creditwatch status, which means that 20th Century Industries’ ratings are no longer being considered for further downgrading.
Prior to the Jan. 17 Northridge earthquake, the company’s claims-paying ability rating was AA, and its credit assessment rating was A+. After the quake, 20th Century Industries’ surplus was hit hard by $685 million in expenses and quake claims, and the company’s rating took a dive. Last month, the company announced it was going to stop selling earthquake insurance policies to homeowners.
The company was able to secure a $175 million bank credit line recently, a factor which helped improve its rating status.
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