Platinum Financial Strength Rating Affirmed
A.M. Best Co. today [May 27] affirmed the financial strength rating of A [Excellent] and issuer credit ratings [ICR] of “a” of Platinum Underwriters Bermuda, Ltd. and its strategic affiliate Platinum Underwriters Reinsurance, Inc.
The international ratings agency also has affirmed the ICR of “bbb” of Platinum Underwriters Holdings, Ltd. and debt ratings of Platinum and Platinum Underwriters Finance, Inc. The outlook for all ratings is stable.
The ratings reflect the group’s excellent capitalisation, consistently strong operating results and well-established business position as a global, multiline provider of reinsurance coverages.
They also reflect the group’s good financial flexibility, stable management team and sound enterprise risk management capabilities. Financial leverage for Platinum has been moderate with debt to total capitalisation in the low double digits. The three-year rolling fixed charge coverage is commensurate with the assigned ratings.
Somewhat offsetting these strengths are the challenges that have occurred in the global reinsurance market including several significant catastrophes over the past several months including the Japanese earthquake and tsunami and the Christchurch temblor and Australian natural disasters.
While first-quarter 2011 results for the reinsurance sector, including Platinum’s, were negatively impacted by the global catastrophes, Platinum’s financial results were in line with A.M. Best’s expectations.
In addition, rate softening, particularly in casualty lines of business, which has been deteriorating for some time, has made it difficult to find new areas for profitable growth. However, Platinum has a strong focus on underwriting discipline and active cycle management, which is evidenced by the company’s substantial reduction in premium volume over the past five years.
This should help insulate the company from the potential for future underwriting losses and place the company in a strong position to participate in future market opportunities.
