AM Best Downgrades Maiden Credit Ratings

November 17, 2018

A.M. Best has downgraded the Long-Term Issuer Credit Rating [Long-Term ICR] to “bb” from “bbb-” of Maiden Holdings, Ltd. and its downstream intermediate holding company, Maiden Holdings North America, Ltd. All Long-Term Issue Credit Ratings [Long-Term IR] of MHLD and MHNA also have been downgraded.

At the same time, A.M. Best has downgraded the Financial Strength Rating to B++ [Good] from A- [Excellent] and the Long-Term ICR to “bbb” from “a-” of Bermuda-based Maiden Reinsurance, Ltd.  The ratings remain under review with negative implications.

A statement from the ratings agency said, “The Credit Ratings [ratings] reflect Maiden Re’s balance sheet strength, which A.M. Best categorizes as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management [ERM].

“Operating performance has been assessed as marginal, as A.M. Best expects MHLD to post a third consecutive underwriting loss and a substantial net loss for the full year 2018, based on year-to-date results.

“While the adverse loss reserve development that has driven a significant portion of the losses will be removed from the group’s books by the transactions, future performance will be dependent on its ability to complete and successfully implement its strategic review.

nsactions and management’s strategic review, and while A.M. Best assesses their impact. The failure of the transactions to have the expected effect on risk-adjusted capital could result in negative rating action, as could further material reductions in the group’s equity in the interim.“

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