S&P upgrades Hanover Insurance

Standard & Poor's said it raised The Hanover Insurance Group Inc.'s (formerly Allmerica Financial Corp.) counterparty credit and senior unsecured debt ratings to BB+ from BB and its preferred stock rating to B+ from B.

S&P also raised First Allmerica Financial Life Insurance Co.'s counterparty credit and financial strength ratings to BBB- from BB.

All ratings were removed from CreditWatch, where they were placed with positive implications on Oct. 31 after the company published positive third-quarter earnings. The outlook is stable.

S&P said Hanover Insurance's upgrade reflects the beneficial impact of its sale of the variable annuity and life businesses, thus removing the guaranteed minimum death benefit-exposed business that had been a concern to S&P.

The ratings action on First Allmerica reflects the change in the liability profile of Hanover Insurance's life operations, the agency said. The sale of First Allmerica represents the departure of the riskier variable annuity and variable life business and the retention of smaller, more stable closed blocks of business at First Allmerica.

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