While it may not beLloyds of London, the upgrade of The Hanover Group last week waspositive news for U.S. insurers.

I mention Lloyds,because it is seeing its heyday right now, at a time when someother large insurers arent doing as well. As I have writtenrecently, Lloyds renaissance is attracting risk managersunderscrutiny from their boardswho are shopping the LondonMarkets.

Their boards, morethan ever and rightly so, are asking questions about the financialstrength of their insurers. Theyre also looking at spreading risksover several insurers. Boardand other pressures are motivating riskmanagers Ive talked to, to go to great lengths to research insurersfinancial security. Buyers say they are not relying on just ratingsorthe recommendations of their brokers as they may have in thepast. After all, their jobs could be on the line.

Hanover was ecstatic when I spoke tothem last week about their upgrade by A.M. Best, from A-minus to A.Hanovers CEO, Frederick H. Eppinger, was extremely pleased with theannouncement. He said his plan has been to build the company into aworld-class institution that will last through thecycles.

This is difficultto achieve in the U.S., he said, because most downgraded p-cinsurers have their ratings lowered because of asbestos and otherenvironmental exposures that are frankly hard to get out of. Youcan get into a death spiral based on balance sheet. He said Hanoverwas fortunate in that it never had any of those challenges. Rather,it was risks from its life company that created capitalpressure.

This upgrade isexactly what buyers need now, to help build overall confidence inthe U.S. markets. The companys achievementespecially at a time whensome insurers are not cast in the best lightis commendable and sureto be noticed by many.