Stable Outlook For Wind River Re
A.M. Best Co. has affirmed the financial strength rating of A [Excellent] and issuer credit ratings [ICR] of “a” of Bermuda’s Wind River Reinsurance Company, Ltd. and its US subsidiaries.
Concurrently, the international ratings agency has affirmed the ICR of “bbb” of the ultimate parent holding company of Wind River Re, Dublin’s Global Indemnity plc. The outlook for all ratings is stable.
Global Indemnity is one of the leading specialty property and casualty insurance groups with operating subsidiaries in Bermuda and the US.
Bermuda-based Wind River is the parent company of the group’s US and non US operations. Included in these entities is United America Indemnity Group Inc. which serves as the US holding company for the group’s US insurance operations.
At the same time, A.M. Best has withdrawn the ICR of “bbb” and debt ratings of the intermediate parent holding company, Cayman’s United America Indemnity, Ltd. due to the transfer of its universal shelf registration to Global Indemnity.
Accordingly, A.M. Best has assigned indicative ratings of “bbb” on senior unsecured debt, “bbb-” on subordinated unsecured debt and “bb+” on preferred stock to Global Indemnity’s shelf registration.
The outlook for these ratings is stable. These indicative ratings and outlook are consistent with the previous ratings of the UAI shelf registration.
“These ratings take into account Global Indemnity’s solid capitalization, strong historical operating performance and its diversified portfolio of specialty products provided on both an admitted and non-admitted basis by Wind River Re and its US subsidiaries,” said an A.M. Best analyst. “The US subsidiaries operate under a single pooling agreement, whereby they pool their premiums and liabilities and cede 50% of their combined net retained liabilities to Wind River Re.
“Wind River Re also continues to maintain a book of unaffiliated, third-party reinsurance to complement the affiliated business.”
These positive rating factors are partially offset by the recent deterioration in the company’s combined ratio due to severe weather losses in both its insurance and reinsurance operations.
“In addition, losses in the professional and general liability lines have adversely impacted operating results,” said the analyst. “While A.M. Best does not believe that recent results are indicative of a trend, it will continue to monitor the results of Global Indemnity. Of special importance will be the company’s ability to successfully execute on the business plans implemented by its newly appointed Chief Executive Officer, Cynthia Valko.”
Ms Valko, who has an extensive insurance background, became CEO of Global Indemnity on September 19, 2011.
Best said factors that may lead to a positive rating action include a sustained improvement in operating performance and the company’s ability to meet or best projections.
Factors that may lead to a negative rating action include a decline in risk-adjusted capitalization, a continuation of weak operating performance or deterioration in Global Indemnity’s reserves.
