Best Affirms IPCRe ‘A’ Ratings

December 6, 2006

A.M. Best Co. has affirmed the financial strength rating (FSR) of “A” (Excellent) and the issuer credit ratings (ICR) of “a” for the reinsurance subsidiaries of Bermuda-based IPC Holdings Ltd.- IPCRe Limited and Dublin-based IPCRe Europe Limited. Best also affirmed the ICR of “bbb”, the debt rating of bb+” on $236.25 million 7.25 percent mandatory convertible preferred stock due 2008, and the indicative ratings for securities available under shelf registration for IPCRe. The outlook for all the ratings is stable.

“The ratings reflect IPCRe’s excellent historical earnings and well established presence within the property catastrophe reinsurance market,” said Best. “Further supporting the ratings is IPCRe’s highly experienced management team and customer-oriented focus. In order to minimize the impacts from catastrophic events, the IPCRe’s Board of Directors has established a preset percentage of capital, which limits aggregate accumulations in any single geographic zone. IPCRe’s management monitors this capital-based limits approach and diversifies the company’s exposure around the world, which achieves an optimal spread of risk.”

Best cited “the decline in the company’s risk-adjusted capital position, attributable to catastrophe losses in 2005,” as an offsetting factor. However, the rating agency noted that “despite severe losses in 2005, primarily due to Hurricane Katrina, IPCRe’s overall performance has been excellent due to its long-term orientation to risk exposure management. IPCRe has a strong balance sheet, which is supported by $1.9 billion of shareholders’ equity.”

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