A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of the operating company, Alterra Bermuda Limited (formerly Alterra Insurance Limited), which is an amalgamation of Alterra Capital Holdings Limited’s (Alterra) Bermuda operating subsidiaries: Alterra Insurance Limited and Harbor Point Re Limited. All of the ratings have a stable outlook. This rating action also applies to Alterra Bermuda’s affiliated operating companies.
At the same time Best withdrew the ratings of Harbor Point Re and assigned a category NR-5 (Not Formally Followed) to the FSR and an “nr” to the ICR, as the company has been merged out of existence.
The rating affirmation of Alterra Bermuda and its strategic affiliates follows the recent completion of a corporate restructuring, merging Harbor Point Re into Alterra Insurance Limited to form Alterra Bermuda Limited.
The affirmation “considers the combined risk-adjusted capitalization, performance and operational efficiency the new structure brings to the group,” said Best. “A single operating company in Bermuda is more efficient for the organization and provides a larger base of capital for policyholders. This amalgamation demonstrates that Alterra’s integration plans continue to move forward in the manner they were originally presented to A.M. Best in the spring of 2010.”
As offsetting factors, Best cited “the current pricing pressures that exist in the casualty insurance and reinsurance markets, and the currently remote yet looming threat of inflation, which could take its toll on casualty writers, including Alterra, in the intermediate and longer term.”
Best summarized the entities affected by its ratings action as follows:
The FSR of ‘A’ (Excellent) and ICRs of “a” have been affirmed for the following operating subsidiaries of Alterra Capital Holdings Limited:
— Alterra Bermuda Limited
— Alterra Reinsurance Europe Limited
— Alterra Insurance Europe Limited
— Alterra America Insurance Company
— Alterra Specialty Insurance Company
— Alterra Reinsurance USA Inc.
Source: A.M. Best
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