A.M. Best Revises ICR Outlook to Negative for Members of QBE North America Insurance Group

  A.M. Best Revises ICR Outlook to Negative for Members of QBE North America
  Insurance Group

Business Wire

OLDWICK, N.J. -- November 15, 2012

A.M. Best Co. has affirmed the financial strength rating (FSR) of A
(Excellent) and issuer credit ratings (ICR) of “a+” of the pooled and
reinsured members of QBE North America Insurance Group (QBENA Group). These
companies are key operating subsidiaries of QBE Insurance Group Limited (QBE)
(Australia), the non-operating holding company of the QBE group of companies.
The outlook for all ICRs has been revised to negative from stable. The outlook
for all FSRs remains stable. (See below for a detailed listing of the
companies and ratings.)

The revised outlook follows the publication on November 12, 2012 of QBE’s
market update on its 2012 forecast results. A preliminary estimate of losses
from Hurricane Sandy of between $350 million and $450 million, as well as an
increase in projected prior year reserve strengthening for the full year to
$380 million, has led the QBE group to revise its projected insurance profit
margin for 2012 to 8% from 12%. As a result, the previously anticipated
recovery in consolidated risk-adjusted capitalization to a strong level,
following deterioration in 2011, is not expected to materialize by year-end

A.M. Best will closely monitor the development in the group’s risk-adjusted
capitalization and performance over the next year. If consolidated
risk-adjusted capitalization recovers to the level previously expected by A.M.
Best during 2013, the negative outlook could revert back to stable. The
absence of an improvement in consolidated risk-adjusted capitalization or a
material decline in the operating performance of the QBE group or its U.S.
subsidiaries could lead to negative rating actions.

The FSR of A (Excellent) and ICRs of “a+” have been affirmed for the following
pooled and reinsured members of QBE North America Insurance Group:

  *Blue Ridge Indemnity Company
  *General Casualty Company of Wisconsin
  *General Casualty Insurance Company
  *Hoosier Insurance Company
  *Lantana Insurance Ltd.
  *NAU Country Insurance Company
  *National Farmers Union Property and Casualty Company
  *North Pointe Insurance Company
  *Praetorian Insurance Company
  *QBE Insurance Corporation
  *QBE Reinsurance Corporation
  *QBE Specialty Insurance Company
  *Regent Insurance Company
  *Southern Fire & Casualty Company
  *Southern Guaranty Insurance Company
  *Southern Pilot Insurance Company
  *Stonington Insurance Company
  *Unigard Insurance Company
  *Unigard Indemnity Company

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Risk Management and the Rating
Process for Insurance Companies”; “Understanding Universal BCAR”;
“Understanding BCAR for Property/Casualty Insurers”; “Rating Members of
Insurance Groups”; “Catastrophe Analysis in A.M. Best Ratings”; “Equity Credit
for Hybrid Securities”; and “Insurance Holding Company and Debt Ratings.”
Best’s Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
David Blades, CPCU, 908-439-2200, ext. 5422
Senior Financial Analyst
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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