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TMCNet:  A.M. Best Revises Outlook to Stable for ProSight Global Holdings Limited and Its Subsidiaries

[June 13, 2014]

A.M. Best Revises Outlook to Stable for ProSight Global Holdings Limited and Its Subsidiaries

OLDWICK, N.J. --(Business Wire)--

A.M. Best has revised the outlook to stable from negative and affirmed the issuer credit rating (ICR) of "bbb" of ProSight Global Holdings Limited (ProSight Global Holdings) as well as the financial strength rating of A (Excellent) and the ICRs of "a" of New York Marine and General Insurance Company and its majority-owned subsidiary, Gotham Insurance Company and wholly-owned subsidiary, Southwest Marine & General Insurance Company (collectively referred to as ProSight Specialty Group).

Concurrently, A.M. Best has revised the outlook to stable from negative and affirmed the ICR of "bbb" and the debt rating of "bbb" on the $140 million 7.5% senior unsecured notes due November 2020 of ProSight Global, Inc. (ProSight Global). These notes are guaranteed by ProSight Global Holdings. Additionally, A.M. Best has withdrawn the ICR of "bbb" and the debt rating of "bbb" on the $100 million 6.5% senior unsecured bonds issued by ProSight Specialty Insurance Group, Inc. (ProSight) since the debt has been redeemed. All companies are headquartered in Morristown, NJ.

The revised outlook reflects the organization's improved operating performance in 2012, 2013 and through the first quarter of 2014, following operating losses in 2010 and 2011. These losses reflected the intentional run-off of less profitable programs coupled with increased exenditures related to staffing, real estate and information technology investments, subsequent to ProSight's acquisition of the company.


The affirmation of the ratings acknowledges ProSight Specialty Group's adequate level of risk-adjusted capitalization, generally favorable operating earnings and strong market niche position. The ratings also recognize the strength of the management team that was brought to the group with the acquisition as well as the progress the team has made to date in repositioning the business and improving performance.

Partially offsetting these positive rating factors are ProSight Specialty Group's elevated expense ratio, as the company completes the build out of its global operating platform, the aforementioned operating losses in the earliest years of the five-year period, limited organic capital generation in recent years and the risks associated with the growth and maturation of new business.

Financial leverage at ProSight Global Holdings supports its current rating level, although coverage ratios have varied over the last few years. Adequate resources are available at ProSight Global Holdings to cover the required interest payments.

Negative rating actions may occur if ProSight Specialty Group has a significant decline in its underwriting profitability and/or deterioration in its level of risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio. Positive rating actions may occur after ProSight Specialty Group demonstrates earnings sustainability over several years, in line with A.M. Best's expectations.

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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


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