A.M. Best Co. announced that it has affirmed the financial strength rating of “A-” (Excellent) of Markel International Insurance Company Ltd. (MIICL) (United Kingdom) and reaffirmed a stable outlook.
“The rating reflects MIICL’s strategic importance to its parent, increased pressure on its risk-adjusted capitalisation derived from premium growth and improved operating performance. An offsetting factor continues to be the uncertainty relating to reserving levels for United States casualty business,” said Best.
The rating agency noted MIICL’s strategically importance to Markel North America Insurance Group with consolidated net premium written forecast to grow by 35 percent at year-end 2004.
Best also indicated that “approximately $150 million of business is likely to be transferred from Lloyd’s Syndicate 3000 to MIICL to take advantage of the company’s lower cost base, which will increase MIICL’s underwriting risk.” However, Best said it “believes that the effect of this on the company’s risk-adjusted capitalisation will be largely offset by anticipated profit retention.”
Best also expects “the consolidated combined ratio to improve to approximately 105 percent (compared with 111.4 percent in 2003), supported by improved underwriting discipline and the maintenance of adequate rates in its core market segments.”
The report concluded with the observation that “there is still some uncertainty relating to the company’s reserves for United States casualty business written between 1997-2001 and asbestos-related claims.” However, Best said it “believes any further deterioration in 2004 is likely to be considerably less than the $10 million charged in the first quarter of 2004.”
Was this article valuable?
Here are more articles you may enjoy.