Fitch drops Associated Electric

Fitch Ratings said it downgraded the insurer financial strength rating of Associated Electric & Gas Insurance Services Ltd. to A- from A+.

The outlook is stable.

Fitch said that the rating downgrade reflects a trend of weak underwriting results and operating profitability, excluding realized gains, exhibited over the past several years, with Associated Electric posting an operating loss in every year since 2002.

These somewhat disappointing results have been driven by a number of factors, including several large event losses in the early 2000s following the soft market of the late 1990s, catastrophe-related losses in 2005 and most recently, adverse loss reserve development in 2006 and 2007, the agency noted.

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