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Moody's lowers QBE Insurance
Moody's Investors Service said it downgraded the issuer and senior unsecured debt ratings of QBE Insurance Group Ltd. to Baa1 from A3.
The action completes a review for downgrade initiated on Nov. 14, 2012 following the company's announcement of estimated losses arising from U.S.-based events including Superstorm Sandy, U.S. crop insurance and reserve strengthening to its U.S. commercial insurance segment, all of which hurt 2012 profitability, constraining internal capital generation and weakening fixed charge coverage.
The outlook is negative.
"The downgrade of the rating primarily reflects the group's weakened earnings, internal capital generation and debt service coverage measures, as well as QBE's sustained elevated financial and operational leverage profile, considered on both a nominal and tangible basis. The group's above-average aggregate worldwide catastrophe exposures relative to capital, and its recent adverse trends in reserve adequacy are additional considerations," Moody's lead analyst for QBE Alan Murray said in a news release.
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