A.M. Best Co. announced that it has assigned a financial strength rating of “A-” (Excellent) and an issuer credit rating (ICR) of “a-” to Omega Specialty Insurance Company Limited (OSIL), a newly formed Bermudan insurer. Best also assigned an ICR of “bbb” to OSIL’s ultimate parent, the U.K.-based Omega Underwriting Holdings Plc (Omega). The outlook for all ratings is stable.
“The ratings of OSIL reflect its excellent prospective risk-adjusted capitalization, strong expected performance and strong business profile linked to its ultimate parent company, Omega, and its Lloyd’s operation (Lloyd’s Syndicate 958,” said Best. It added that it “anticipates that the combination of a reinsurance of Omega Dedicated Limited (Omega’s corporate member at Lloyd’s) and a whole account reinsurance of syndicate 958 will initially generate over 90 percent of OSIL’s business.”
Best also indicated that it “believes that OSIL is likely to maintain excellent risk-adjusted capitalization, factoring its achievable and conservative objectives in its early years of operation. OSIL’s links to the Omega group (which obtained a listing on London’s Alternative Investment Market in April 2005) will provide the company with additional financial flexibility should the need arise.”
In Best’s opinion, “OSIL is likely to write a highly profitable portfolio of business based on syndicate 958’s excellent long-term track record. A.M. Best forecasts an excellent return on capital employed, factoring a loss ratio of below 65 percent at year-end 2006. This is supported by the strengthening market for many of the classes written by OSIL (particularly in the United States), of which non-marine property (43 percent of 2006 estimated gross written premium), property catastrophe (20 percent) and property per-risk (15 percent) represent the core of the portfolio.”
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