Ratings: Max Capital

Standard & Poor’s Ratings Services said today that it revised its outlook on Max USA Holdings Ltd. and Max Capital Group Ltd. to positive from stable. S&P also affirmed its ‘BBB-‘ counterparty credit ratings on both companies. Max USA Holdings is a wholly owned subsidiary of Max Capital Group Ltd. “Max Capital enjoys a good competitive position as a diversified insurance and reinsurance company, adequate enterprise risk management, strong operating performance, and strong capitalization,” said S&P. Max Capital allocates about 20 percent of its total invested assets to hedge funds (alternative asset class). “We expect this allocation to remain at 15 to 20 percent, so its investments are a neutral rating factor at this time. In contrast, negative factors to the rating are Max Capital’s limited scale, somewhat high risk profile of underwriting difficult classes of casualty exposures, concentration within Fortune 1,000 accounts that will diminish in the future with the expansion of the U.S. excess and surplus lines (E&S) business, and two restatements in 2006. However, Max Capital remediated and closed all pending matters with the SEC in 2007.”