A.M. Best Affirms Ratings of First Beacon Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and the issuer credit rating (ICR) of “bbb+” of First Beacon Insurance Company (First Beacon) (Burlington, VT).The outlook for both ratings is stable.

The ratings reflect First Beacon’s robust capitalization, very low leverage measures, continued recent favorable operating performance and the strategic role it serves as a captive insurance company for its parent, Alcatel-Lucent (NYSE: ALU), primarily for the U.S. exposures of the newly merged company.

These positive rating factors are offset in part by First Beacon’s substantial variation in underwriting income and net income over the past five years. Another offsetting rating factor is the concern over the parent company’s long-term business profile. First Beacon is an insurance company considered bankruptcy remote from Alcatel-Lucent. Nonetheless, its baseline property and casualty book of business volume is dependent in large part on the economic success of Alcatel-Lucent and its affiliates and subsidiaries. A.M. Best notes the strength of the management team, well-developed plans to meet the continuing insurance needs of Alcatel-Lucent and the maintenance of substantial levels of capital within the captive.

A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world.

For current Best’s Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.