Bermuda-based XL Capital Ltd. has issued two separate comments following yesterday’s announcement by Standard & Poor’s Ratings that it has downgraded XL and its operating subsidiaries (See IJ web site – http://www.insurancejournal.com/news/international/2008/12/16/96328.htm).
CEO Michael S. McGavick expressed his disappointment with S&P’s decision, “particularly in light of the many positive comments S&P made about XL in its release.”
McGavick explained: “While economic uncertainty continues to exist, at this time we have no need or intent to seek additional capital and will continue to focus on what we do best: serving our customers and operating our franchise. As a company rated ‘A’ (strong) by S&P, we expect to remain a strong competitor in both insurance and reinsurance. We will also continue the enhancement of our enterprise risk management, the de-risking of our investment portfolio, as well as the ongoing strategic review of our life reinsurance operations.”
In a separate bulletin McGavick pointed out that “in order to provide further information regarding our ratings, we felt it appropriate to comment on our A.M. Best financial strength rating.”
He stated, that, based on “very recent discussions with A.M. Best in which we reviewed our business and financial condition, A.M. Best is leaving our “A” Excellent/Stable outlook rating on our core operating subsidiaries unchanged.”
He reiterated XL’s position that it “has no need or intent to seek additional capital at this time.”
He also indicated that, “we are pleased with the results of our discussions with A.M. Best and believe it is indicative of our financial strength and the power of our franchise.”
XL also separately confirmed that it does not have any investments in any funds managed by Bernard L. Madoff Investment Securities LLC.
Source: XL Capital – www.xlcapital.com
IJ Ed Note: Despite Mr. McGavick’s quite understandable defense of his company, one doesn’t go out and hire Goldman Sachs “to explore value-enhancing opportunities,” unless it at least contemplates the need to raise capital. That usually requires selling assets. See IJ web site – http://www.insurancejournal.com/news/international/2008/12/12/96249.htm