A.M. Best Co. announced that it has upgraded the financial strength rating of the U.K.-based QBE International Insurance Limited (QIIL) to “A” (Excellent) from “A-” (Excellent) and the issuer credit rating to “a+” from “a-“. The outlook for both ratings is stable.
In a related move, Best also announced that it has also upgraded QBE (U.K.), a subsidiary of QIIL, also based in London (See related article).
“The rating upgrades reflect support from QIIL’s ultimate parent [Australia’s] QBE Insurance Group (QBE),” said Best. “An implicit supporting factor is the integral part QIIL plays in QBE’s global business strategy, with the company accounting for approximately a third of the group’s income on a consolidated basis, including QBE Insurance Company UK Limited and QBE’s U.S. operations.
“QIIL also writes a broad spread of business in the London market, including general liability, specialty lines and property. In addition, explicit support was provided in December 2004 in the form of a capital injection of GBP 73.4 million (USD 133.9 million) from QBE, which offsets anticipated net premium growth of 20 percent in 2005 in A.M. Best’s risk-adjusted analysis of QIIL’s consolidated capitalisation.”
Best also indicated: “The premium growth in 2005 will largely emanate from the transfer to QIIL of the part of the Ensign motor portfolio (GBP 120 million (USD 218.9 million) of additional gross premium) that was written by QBE’s Lloyd’s operation.”
The rating agency said its “projections for QIIL’s future earnings are good, although there is likely to be some pressure as the market softens. Nonetheless, a combined ratio in the region of 95 percent-100 percent is anticipated in 2005.
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