Standard & Poor's Ratings Services today upgraded itsratings for Argonaut Group Inc., citing the San Antonio,Texas-based property-casualty insurer's improved profits andcapitalization.

The New York-based S&P said it raised Argonaut'scounterparty credit rating to "triple-B-minus" from"double-B-plus." The firm also raised counterparty credit andfinancial strength ratings on Argonaut's operating insurancecompanies to "A-minus" from "triple-B-plus." The outlook onArgonaut and its subsidiaries is stable.

S&P credit analyst Jason Jones noted several positivedevelopments at Argonaut that prompted S&P to upgrade itsratings. They include: Argonaut's strong capitalization, improvedearnings and competitive position, successful execution of itsstrategic focus on niche markets, and a level of financial leveragesupportive of the rating.

Further, Argonaut's underwriting results are expected tocontinue to improve this year, with a combined ratio of between 95and 96, S&P predicted. S&P cited strong results in excessand surplus lines, lower expected catastrophe losses, and continuedconsistent underwriting profits from the select markets andpublic-entity segments for its upbeat forecast.