Tornados Cut Through Mariah’s Rating

Mariah Re Ltd., a catastrophe bond covering American Family Mutual Insurance from severe thunderstorms, had its rating cut by Standard & Poor’s Monday following additional reported losses following U.S. tornados.

S&P lowered its rating on Mariah Re series 2010-1 notes to ‘CCC+’ from ‘B’ and revised the catastrophe bond status to “developing” from “negative.”

According to the S&P statement, Property Claims Services‘ preliminary estimate of total losses covered by Mariah through the end of May is $453 million and modeled losses were expected to equal $302 million.

Although the bond was not triggered since losses did not meet the attachment point, the rating agency downgraded the notes to indicate the increase likelihood of a loss. S&P said that if additional qualifying events do not occur over the next two months and “loss estimates on existing covered events do not increase by a material amount” the bond will be upgraded.

Mariah Re was placed on CreditWatch last month after severe storms in the U.S. Midwest caused an estimated $15 billion in insured looses, according to AIR Worldwide.

Great! You’ve successfully signed up.

Welcome back! You've successfully signed in.

You've successfully subscribed to Risk Market News.

Success! Check your email for magic link to sign-in.

Success! Your billing info has been updated.

Your billing was not updated.