Moody's has changed the insurance financial strength ratings of members of the Legion Insurance Companies pool from Baa2 (adequate) to Ba2 (questionable). The ratings remain on review with the possibility of further downgrade.
Moody's has changed the insurance financial strength rating of members of the Legion Insurance Companies pool from Baa2 (adequate) to Ba2 (questionable). The ratings remain on review with the possibility of further downgrade.
The Legion Insurance Companies comprise the principal insurance underwriting subsidiaries of Bermuda-based Mutual Risk Management Ltd (MRM).
The downgrades follow yesterday's announcement by MRM of a net loss of $99.7m (£70m) in the fourth quarter of 2001.
Moody's said the rating downgrades reflect its concerns about MRM's and the Legion companies' reduced financial and operating flexibility.
This is a result of the companies' increased business and financial leverage, constraints resulting from violations of covenants in its bank credit facilities, and diminished access to the capital markets because of the sharp decline in value of the holding company's shares.
The companies whose ratings have been changed are the Legion Insurance Company, Legion Indemnity Company and Villanova Insurance Company.
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