Fitch Ratings has affirmed the ‘A’ insurer financial strength rating of Max Re Ltd. In addition, Fitch assigned an ‘A’ insurer financial strength rating to Max Re’s wholly owned, Dublin-based subsidiary, Max Re Europe Limited. The Rating Outlook is Stable.
Max Re, a Bermuda-based multi-line reinsurance company that was formed in July 1999 and commenced operations in January 2000, is the principal subsidiary of Max Re Capital Ltd., a Bermuda-based insurance holding company formed in conjunction with Max Re.
Although top line operating results have been good, Max Re’s 2001 bottom line profitability has not met expectations. The shortfall can be traced to lower than anticipated investment results and is not due to unfavorable underwriting, although a $3 million net loss related to Sept. 11 also had a negative impact. During the 3rd quarter of 2001, the company’s alternative investment portfolio yielded a net loss of $4.7 million (or negative 0.83 percent). This led to an overall investment yield of 2.18 percent for the three months ended Sept. 30, 2001 and 6.44 percent for the nine months ended the same date. For the full-year 2001, the alternative portfolio yielded 6.69 percent and the total investment portfolio yielded 7.78 percent.
Max Re posted $671 million of capital as of Dec. 31, 2001. This includes the benefit of approximately $165 million that was infused into the company from the proceeds of its parent’s recent IPO.