|[October 07, 2013]
A.M. Best Downgrades and Removes From Under Review Ratings of American Safety Risk Retention Group, Inc.
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has downgraded the financial strength rating (FSR)
to B++ (Good) from A (Excellent) and the issuer credit rating (ICR) to
"bbb+" from "a" of American Safety Risk Retention Group, Inc. (American
Safety RRG) (Burlington, VT). Both ratings have been removed from
under review with negative implications and assigned a stable outlook.
The rating actions are based on American Safety RRG currently operating
as a stand-alone entity as a result of the completion of the acquisition
of its former publicly traded ultimate parent, American Safety
Insurance Holdings, Ltd. (ASI) (Hamilton, Bermuda), by Fairfax
Financial Holdings, Ltd. (Fairfax)(TSX:FSH)(TSX:FFH.U) (Toronto,
Canada). American Safety RRG was not a part of ASI's acquisition by
Fairfax and therefore will not be an affiliate of either one of the
publicly traded entities going forward.
The ratings reflect the benefits to American Safety RRG's executed loss
portfolio transfer and casualty excess of loss reinsurance contracts.
The ratings for American Safety RRG are based on A.M. Best's expectation
that management will run the company in accordance with business plans
shared with and evaluated by A.M. Best.
Positive rating actions ould occur if American Safety RRG succeeds in
meeting or exceeding its operating plan of providing insurance solutions
to protect specialty niche businesses against liabilities associated
with environmental hazards, resulting in organic capital growth, balance
sheet fortification and an enhanced business profile. The execution risk
involved with American Safety RRG adding to its current book of business
profitably is one of the key factors that could trigger negative rating
actions, specifically if underwriting or operating results fall
materially short of its plan. Similarly, a failure to maintain adequate
risk-adjusted capitalization also would be a factor that would affect
the company's ratings adversely.
A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated in the United States
and throughout the world. For current Best's Credit Ratings and
independent data on the captive and alternative risk transfer insurance
market, please visit www.ambest.com/captive.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS
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