Best Assigns ‘A-‘,’a-‘ Rating to Glacier Re

A.M. Best Co. announced that it has assigned a financial strength rating of “A-” (Excellent) and an issuer credit rating of “a-” to Glacier Reinsurance AG (Glacier Re), the newly formed Swiss reinsurer. The outlook for both ratings is stable.

Best said it “believes that the company’s prospective risk-adjusted capitalisation at year-end 2005 is likely to be excellent, based on conservative forecasts for performance and factoring the potential impact of major loss scenarios on the company. A 2005 loss ratio of between 70 percent and 80 percent is anticipated, subject to normal loss experience. A comprehensive reinsurance programme placed with highly rated reinsurers is likely to mitigate any major deviation from forecast as a result of the incidence of catastrophic losses.”

Best also noted, however, that it “believes Glacier Re’s account is likely to be relatively high risk, including a substantial retrocessional account, marine and aerospace reinsurance, as well as war and terrorism business.

“However, the company has access to a well-diversified book of business, based on the strong relationships of the management team with broker distribution channels. Although A.M. Best anticipates weakening in the market for many of the classes written by Glacier Re in 2005 and 2006, the company’s position as a relatively small niche reinsurer in a market where several continental reinsurers have substantially reduced business volumes is likely to ensure that the company can develop a profitable account of business.”

Topics Reinsurance