A.M. Best Co. has affirmed the issuer credit rating (ICR) of “bbb-” of Ironshore Inc. ,based in the Cayman Islands, and the financial strength rating of ‘A-’ (Excellent) and ICRs of “a-” of its operating subsidiaries. These include Ironshore Insurance Ltd. (Bermuda), Ironshore Indemnity Inc. (Minneapolis, MN) and Ironshore Specialty Insurance Company (Phoenix, AZ). The outlook for all of the ratings is stable.
Best has also withdrawn the FSR of ‘A-’ (Excellent) and ICR of “a-” of Bermuda-based Ironshore Reinsurance Ltd. and assigned an NR-5 (Not Formally Followed) to the FSR and an “nr” to the ICR.
The ratings reflect Ironshore’s “strong risk-adjusted capitalization, enhanced and maturing business profile and highly experienced management team,” said Best. They also reflect the “successful execution of Ironshore’s 2009 business plan, which it shared with A.M. Best following the change in management in fourth quarter 2008.”
However Best cited the group’s “exposure to increased credit risk from its dependence on reinsurance as a source of capital within its operating strategies and the uncertainty borne by the company’s limited operating history using the current corporate strategies and targeted lines of business,” as offsetting factors.
Best also cited “the pace of growth in the context of challenging underwriting conditions and the uncertainty associated with measuring loss costs in longer-tailed lines of business,” as two additional factors for concern.
Best said the outlook recognizes its expectation that “performance and risk-adjusted capitalization will continue to support Ironshore’s operating strategies and growth initiatives.
“The withdrawal of the ratings for Ironshore Re acknowledges the company’s dormant status and the completed transfer of all remaining liabilities to Ironshore Specialty. Ironshore Re was originally established in 2007 as a short-term internal reinsurance vehicle.”
Source: A.M. Best