Fitch Upgrades Montpelier Re Ratings
Fitch Ratings upgraded the ratings of Bermuda-based Montpelier Re Holdings Ltd. These ratings upgrades include Montpelier’s senior unsecured debt rating, which was upgraded to ‘BBB+’ from ‘BBB’, and the Insurer Financial Strength (IFS) rating of Montpelier Reinsurance Ltd. (Montpelier Re), which was upgraded to ‘A’ from ‘A-’. A full list of ratings actions follows at the end of this release. The Rating Outlook is Stable.
A statement from the ratings agency said: “The ratings upgrade reflects Montpelier’s solid operating performance and internal capital generation over the past several years. The upgrade also reflects that the company’s underwriting performance, while still volatile relative to many comparably rated reinsurers, is comparable to other property catastrophe reinsurers rated by Fitch when viewed on a multi-year rolling average basis.
“Montpelier reported $169 million of net earnings in 1H12, driven by a strong combined ratio of 67.2%, which benefited from light catastrophe losses during the period. This result more than offsets the $124 million loss reported for the full year 2011, when record high international catastrophe losses hurt Montpelier’s results, along with most other global reinsurers.
“Fitch further observes that the company’s share of global catastrophe losses over the last several years, while significant in some cases, has been manageable and consistent with levels that might be expected from a reinsurer of Montpelier’s size and focus.
“Fitch believes that the company uses sound risk management processes to manage its exposure to potential catastrophe related losses by geographic zone and relative to its capital base. Montpelier’s low underwriting leverage enables the company to preserve capital during periods that include underwriting volatility.”
