A.M. Best Co. has affirmed the financial strength rating of B++ (Good), downgraded the issuer credit rating to “bbb” from “bbb+” and revised the outlook to negative from stable for First Beacon Insurance Company (First Beacon) (Burlington, VT).

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 Alcatel-Lucent (France) (NYSE:ALU), primarily for the parent’s U.S. exposures. A.M. Best also notes the strength of First Beacon’s management team, its well-developed plans to meet the continuing insurance needs of Alcatel-Lucent and the maintenance of substantial levels of capital within the captive.

These positive rating factors are offset in part by the company’s substantial variation in underwriting income and net income in recent years. Another offsetting rating factor is A.M. Best’s concern over Alcatel-Lucent’s long-term business profile. First Beacon’s baseline property/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 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.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

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.