A.M. Best Affirms Ratings of Alterra Capital
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Alterra Bermuda Limited (Alterra Bermuda) and its affiliated operating companies.
Concurrently, A.M. Best has affirmed the ICR of “bbb” of Alterra Bermuda’s immediate parent company, Alterra Capital Holdings Limited (Alterra). A.M. Best also has affirmed all debt ratings of Alterra, Alterra USA Holdings Limited, Alterra Finance, LLC (both domiciled in Delaware) and Alterra Capital Trust I. All the above named companies are domiciled in Bermuda, unless otherwise specified. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.) On May 1, 2013, Alterra was acquired by Markel Corporation (Markel) (Glen Allen, VA) [NYSE: MKL], and the integration is ongoing. Both Alterra and Markel are specialty-focused underwriters.
A statement from the ratings agency said, “The ratings for the Alterra organization take into consideration its recent change in ownership, the future benefits to be derived from its integration into Markel, as well as some of the immediate benefits gained in terms of enhanced scale, reach, the Markel brand, distribution platform and its leadership position in the excess and surplus lines marketplace in the United States. With integration plans underway, A.M. Best will continue to maintain a dialogue with management to review and discuss Alterra, its future plans and how the Alterra organization will ultimately align with Markel and its existing members. Until that time, the ratings of Alterra are considered as if this were a “bolt-on” acquisition and assume no material changes to business profile, capitalization, performance as well as inter-company reinsurance.
“In addition to the new owner, these ratings also reflect Alterra Bermuda’s solid financial performance through the second quarter of 2013 and its strong risk-adjusted capitalization. Alterra has platforms and operations in major global underwriting markets, which gives it flexibility to optimize its underwriting portfolio composition. Being part of Markel, revenue and earnings prospects are likely to be enhanced through synergies, the leveraging of existing business relationships and efficiencies gained.”
