Ratings Recap: Thai Re, Aspen, Valiant, Qatar Insurance

December 10, 2007

Standard & Poor’s Ratings Services has raised its long-term local currency counterparty credit and insurer financial strength ratings on Thai Reinsurance Public Co. Ltd. (Thai Re) to ‘A-‘ from ‘BBB+’ and assigned a stable outlook. “This upgrade reflects the company’s strong and sustainable earnings and gradually diversifying business portfolio,” stated S&P credit analyst Paul Clarkson. “The ratings are also supported by Thai Re’s strong capitalization and solid market position as the country’s leading domestic reinsurance company with a long established market knowledge and relationship with the primary market.”

A.M. Best Co. has affirmed the financial strength rating of ‘A’ (Excellent) and the issuer credit rating (ICR) of “a” of Aspen Insurance UK Limited (AIUK). Best also affirmed the ICR of “bbb” of AIUK’s ultimate parent, Bermuda-based Aspen Insurance Holdings Ltd. debt ratings of “bbb” on the $250 million 6 percent senior notes, “bb” on the $200 million perpetual non-cumulative preference shares and the $230 million perpetual preferred income equity replacement securities, all issued by Aspen. In addition Best affirmed the ratings for Aspen’s universal shelf registrations of “bb”, “bbb-” and “bbb” on preferred stock, senior unsecured and subordinated debt, and upgraded to “bbb-” from “bb+” the
rating on the junior subordinated debt. The outlook for all ratings has been revised to stable from negative. Best explained that the “change in outlook reflects a sustainable improvement in AIUK’s stand alone risk-adjusted capitalization and excellent financial performance.” Aspen has also continued to balance the spread of business between its two main operating entities, AIUK and its sister company, Aspen Insurance Limited (AIL) (see below), of Bermuda through the use of intra-group quota share arrangements. “This even distribution of risk, AIUK’s excellent risk-adjusted capitalization and excellent financial strength of the consolidated group has led A.M. Best to harmonize the
ratings of both entities.”

A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit rating (ICR) to “a” from “a-” of Bermuda’s Aspen Insurance Limited (AIL) and assigned a stable outlook. “The rating upgrades reflect a sustainable improvement in AIL’s stand alone risk-adjusted capitalization, which is likely to be supported by strong retained earnings of above $150 million in both 2007 and 2008,” said Best. The rating agency also noted the balance of business between AIL and AIUK, as indicated in the previous paragraph. Best also noted that it “believes that AIL is likely to continue to produce excellent earnings in 2007, benefiting from profitable underwriting, strong rate adequacy in the property catastrophe market (despite weakening) and improved investment returns. A stable combined ratio in the region of 80 percent is likely, supported by another benign U.S. hurricane season.”

A.M. Best Co. has assigned a financial strength rating of ‘A-‘ (Excellent) and an issuer credit rating of “a-” to Valiant Insurance Company, which is based in Delaware. The outlook for both ratings is stable. Best noted that Valiant’s ultimate parent is Ariel Holdings, Ltd., which owns Ariel Reinsurance Company Ltd. (Ariel Re) and the UK-based Atrium Underwriting Plc. Ariel and >Ariel Re are based in Bermuda. “Valiant has been capitalized with $50 million and will initially focus on professional and management liability in addition to other casualty lines of business,” Best explained. “Gary Dubois will lead Valiant as president and chief executive officer. Valiant will be a critical component in the overall long-term diversification strategy of Ariel,” which has entered into agreements to support it.

Standard & Poor’s Ratings Services has assigned its ‘A’ long-term insurer financial strength rating to Qatar Financial Center-based Qatar Insurance Co. International LLC (QIC International) with a stable outlook. “The rating on QIC International is based on a guarantee provided by Qatar-based Qatar Insurance Co. S.A.Q. (QIC; A/Stable/–),” which meets our guarantee criteria,” said S&P. Credit analyst Jelena Bjelanovic indicated that S&P “expects the rating on QIC International to move in lockstep with that on QIC. The stable outlook on QIC International reflects the stable outlook on its guarantor, QIC.”

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