A.M. Best Places Torus Insurance Under Review
A.M. Best Europe Rating Services Limited has placed under review with negative implications the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Torus Insurance (Bermuda) Limited (Bermuda), Torus Insurance (UK) Limited (United Kingdom) and Torus Insurance (Europe) AG (Lichtenstein).
Concurrently, A.M. Best has placed under review with negative implications the ICR of “bbb-” of Torus Insurance Holdings Limited (Torus) (Bermuda), the ultimate parent company of the Torus group.
In addition, A.M. Best Co. has placed under review with negative implications the FSR of A- (Excellent) and ICRs of “a-” of Torus Specialty Insurance Company and Torus National Insurance Company (both domiciled in Wilmington, Delaware, USA).
The rating actions follow the announcement of 9 July 2013 that Bermuda-based Enstar Group Limited has entered into a definitive agreement to acquire Torus. Following the closing of the transaction, Enstar will own 60% of Torus with Stone Point owning the remaining 40%. The transaction is expected to close in the fourth quarter of 2013.
Best said, “Torus’ consolidated financial results have been sub-par over the last three years and additional capital injections have been required to support growth and offset retained losses. Management has taken actions to reduce earnings volatility and improve performance but these are not yet fully tested.
“While the acquisition, once completed, will improve Torus’ financial flexibility and likely lead to expense savings, uncertainty exists surrounding the group’s prospective operating performance, capital position and business strategy under its new ownership.
“As a result, the ratings have been placed under review with negative implications. A.M. Best expects to resolve the under review status upon completion of the transaction, following discussions with Torus’ management, Enstar and Stone Point.”
I’ll give them 6 months.
Agreed, joke company. In at the wrong time, out soon.