A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) of U.K.-based W. R. Berkley Insurance (Europe) Limited (WRB). Best also assigned an issuer credit rating (ICR) of “a” to WRB reflecting the rating agency’s “opinion on the overall ability of WRB to meet its senior obligations, which are insurance policies; hence both ratings (financial strength and ICR) are at the same level.” The outlook on both ratings is stable.
“The ratings reflect the company’s strong capitalisation and support from the W.R. Berkley group,” Best said. “They also reflect a strong business profile, as well as a strong and improving financial performance. Offsetting factors are the logistical issues associated with establishing a new operation.”
Best said it “expects prospective capitalisation to be enhanced by strong retained earnings during the company’s first full year of operation in 2004 of approximately £4 to £5 million ($7.4 to $9.2 million).
“WRB benefits from a highly-experienced management team, and its long-standing relationships with brokers in the London market will, most likely, enable it to grow its year-end 2003 gross premium (£30 million ($53.4 million)) significantly by year-end 2006, subject to adequate rating levels being achieved. The book of business will continue to consist primarily of professional indemnity.”
The bulletin also noted that “approval has been granted from the Financial Services Authority for WRB to enter into a consortium agreement with Kiln plc (Kiln) (United Kingdom), which will be effective January 1, 2005. Under the terms of the arrangement, WRB will participate in a consortium with Kiln on property reinsurance business. WRB will retrocede its share to Berkley Insurance Company (United States) in return for an overrider commission and expense rebate.”
Best indicated that it “expects strong prospective financial performance factoring the expertise of WRB’s management and underwriting team, despite more competitive professional indemnity rates as a consequence of increased capacity in the United Kingdom in 2004.”
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