A.M. Best Places PaCRe Ltd. Under Review

January 22, 2015

A.M. Best has placed the financial strength rating of A- [Excellent] and the issuer credit rating of “a-” of PaCRe, Ltd. [PaCRe] [Hamilton, Bermuda] under review with negative implications.

A statement from the ratings agency said, “The under review status is a result of the shortfall in PaCRe’s overall performance relative to its original projected business plan, resulting from significant unrealized investment losses since inception relating to its alternative asset strategy.

“Although, the company has not achieved its projected premium volume, which is primarily due to the current competitive market conditions in property catastrophe reinsurance, it has produced positive underwriting results year over year, which is evidence of the solid underwriting and strong cycle management capabilities of the underwriting manager.

“The ratings will remain under review pending further discussions with management concerning the shortfalls in performance and what, if any, actions might be taken, as it regards underwriting and investment strategies going forward.

“Rating factors that could result in negative rating actions include a continuation of significant investment losses, realized or unrealized, and/or an inability of the company to produce positive underwriting results.

“Rating factors that could result in positive rating actions include strong investment returns and solid underwriting results with average to below-average volatility, while maintaining strong risk-adjusted capitalization.”

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Category: All, Business