Global Header | Moody's
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Announcement:

Moody's affirms Liberty Mutual's ratings; outlook revised to stable

12 Nov 2010

Approximately $5.7 billion of debt and hybrid securities affected.

New York, November 12, 2010 -- Moody's Investors Service has affirmed the Baa2 senior unsecured debt and A2 insurance financial strength ratings of Liberty Mutual Group Inc. (LMGI) and its subsidiaries, respectively. The outlook on all long-term ratings has been revised to stable, from negative.

According to Moody's, the rating affirmation for Liberty Mutual is based on its leadership position in both commercial and personal lines insurance throughout the USA and its significant international presence, on the breadth of its product and distribution platform, and on the group's overall strong asset quality and good profitability in recent years. These strengths are tempered by the insurance group's elevated operational and financial leverage, by its below-average underwriting margins relative to peers, and by exposures to losses from natural and man-made catastrophes and the potential for adverse reserve development in long-tail casualty lines. Another credit concern has continued to be the parent company's access currently to debt-only capital, which Moody's believes constrains the organization's financial flexibility in the capital-intensive and often volatile property/casualty insurance sector. The company's recently-postponed plans to pursue a partial IPO of its Agency Markets operations offers the potential longer term for enhanced financial flexibility.

The rating agency added that the shift to a stable outlook, from negative, is based on the following considerations: 1) the group's steadily reduced, though still elevated, financial and operational leverage profile on both a nominal and tangible basis in 2009 and year-to-date 2010; 2) the fact that, notwithstanding the recent postponement of the Agency Markets IPO, Liberty Mutual now has the ability, if it chooses, to access equity capital markets, subject to market conditions; 3) the overall successful integration of acquisitions made in recent years, particularly Safeco and Ohio Casualty; and 4) the group's strengthened leadership position in the U.S. property & casualty insurance sector, across both commercial and personal lines.

Expanding on its rationale, Moody's noted that Liberty Mutual's high degree of earnings retention in the past two years, together with significant recovery in the market valuation of its investment portfolio, have enabled the group to strengthen its capital base and operational and financial leverage profile. Moody's review of Liberty Mutual's core reserve position also finds it to remain adequate, with the possibility of some continuing small redundancies, which is also supportive of the group's capital position. Additionally, management's efforts to diversify the group's external sources of alternate liquidity, including repo and secured lending facilities with the FHLB, and to prepare Liberty Mutual Agency Corporation ("LMAC") for a partial IPO, have -- in Moody's view -- incrementally improved the group's financial flexibility. Finally, Moody's notes that the significant acquisition-related goodwill intangibles on Liberty Mutual's balance sheet, relative to equity capital, will remain a general credit concern, as they elevate the group's effective financial and operational leverage profile.

Alan Murray, lead analyst at Moody's for Liberty Mutual noted: "Liberty has positioned itself as one of the leading providers of commercial and personal lines insurance in the US with a growing international presence--it ranks as the fifth largest P&C group overall in the U.S." Murray continued, "Operating leverage and financial flexibility continue to be general concerns for the group, but high earnings retention levels in the past couple of years, together with steady progress in reducing financial leverage and the company's ability to access the equity capital markets are incremental positives that have supported the return to a stable outlook."

Moody's noted that, despite the affirmation and return to a stable outlook, a rating upgrade is not considered likely over the near-to-intermediate term, given previously noted concerns, and a particularly challenging current market environment in commercial property-casualty insurance. Longer-term, however, factors that could lead to a rating upgrade include continued strong earnings and internal capital generation with a further improvement in financial leverage (below 25% and below 30% relative to tangible capital) and gross underwriting leverage (below 5x, adjusted for certain reinsurance balances). Factors that could lead to a rating downgrade include the following: gross underwriting leverage above 6.5x (adjusted for certain reinsurance balances); financial leverage above 35% (45% relative to tangible capital); sustained pre-tax operating returns on premium below 5%; and/or catastrophe-related losses or adverse reserve development resulting in a decrease in GAAP policyholders' equity of 10% or more.

The following ratings have been affirmed with stable outlooks:

- Liberty Mutual Group Inc.: senior unsecured debt at Baa2; junior subordinated debt at Baa3; rating at Prime-2 for commercial paper (guaranteed by Liberty Mutual Insurance Company); guaranteed senior unsecured medium term note program at (P)Baa1 of Liberty Mutual Capital Corporation (subsequently merged into LMGI) based on a guarantee from Liberty Mutual Insurance Company;

- Liberty Mutual Insurance Company: insurance financial strength at A2; surplus notes at Baa2; long-term issuer credit rating at Baa1;

- Ohio Casualty Corporation: senior unsecured debt at Baa2;

- Safeco Corporation: senior unsecured debt at Baa2.

Insurance financial strength ratings at A2 for other members of the Liberty Mutual and affiliated intercompany pool, including the following:

- American Economy Insurance Company

- American Fire & Casualty Company

- American States Preferred Insurance Company

- American States Insurance Company

- Employers Insurance of Wausau

- The First Liberty Insurance Corporation

- First National Insurance Company of America

- General Insurance Company of America

- Insurance Company of Illinois

- Liberty Insurance Corporation

- Liberty Insurance Underwriters, Inc.

- Liberty Mutual Fire Insurance Company

- Liberty Mutual Insurance Company

- Liberty Surplus Insurance Corporation

- LM Insurance Corporation

- The Ohio Casualty Insurance Company

- Ohio Security Insurance Company

- Safeco Insurance Company of America

- Safeco Insurance Company of Illinois

- Safeco National Insurance Company

- Wausau Business Insurance Company

- Wausau General Insurance Company

- Wausau Underwriters Insurance Company

- West American Insurance Company.

The A2 insurance financial strength ratings of the following companies have been withdrawn, given their merger into other rated affiliates:

- Avomark Insurance Company

- Liberty Insurance Company of America.

Liberty Mutual Group Inc. reported net income of $567 million for the third quarter of 2010 (3Q10), as compared with net income of $260 million for 3Q09. Results for 3Q10 reflected a $150 million increase in private equity income. Policyholders' equity as of September 30, 2010 was $16.9 billion.

The principal methodology used in rating Liberty Mutual Group Inc. and its principal subsidiaries is Moody's Global Rating Methodology for Property and Casualty Insurers, published in May 2010 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating Liberty Mutual Group Inc. can also be found in the Rating Methodologies sub-directory on Moody's website.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay senior policyholder claims and obligations.

For more information, visit our website at www.moodys.com/insurance.

New York
Alan Murray
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Robert Riegel
MD - Insurance
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.

Moody's affirms Liberty Mutual's ratings; outlook revised to stable
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
Global Footer | Moody's