A.M. Best on Tuesday changed its outlook on Assurant's financial strength rating to stable from negative, noting the company's diverse business mix and presence in multiple niche markets. The negative outlook had indicated that a ratings downgrade was possible.

A.M. Best also reaffirmed the ratings of 19 of Assurant's 22 subsidiaries. The ratings of three life insurance subsidiaries -- Union Security Insurance Co., Union Security Life Insurance Co. of New York and American Memorial Life Insurance Co. -- were cut to "A-" from "A." The new ratings are still considered investment grade.

Assurant shares rose $3.90, or 21.8 percent, to close at $21.79 Wednesday. Shares have traded between $12.52 and $71.31 during the past year.

Insurers have come under close scrutiny in recent months amid the ongoing credit crisis, as some insurers could face mounting losses from investments, which in turn could put pressure on their capital reserves and earnings.

"All of our rated underwriting entities continue to have 'A-' or better ratings, and we believe that Assurant remains well-capitalized and well positioned to continue to deliver on our commitments to our policyholders and compete effectively," Robert Pollock, Assurant's president and chief executive, said in a statement Wednesday.

The downgrades of Union Security Insurance and American Memorial Life reflected capital losses incurred during the third quarter, A.M. Best said in the statement. The rating for Union Security Life Insurance of New York was cut because the unit serves as the primary marketing arm for Union Security Insurance, the ratings agency added.