Bermuda-based Quanta Capital Holdings Ltd., provided the following comments on A.M. Best’s decision to place Quanta Reinsurance Ltd. and its subsidiaries and Quanta Europe Ltd. under review with negative implications earlier in the week.
Tobey Russ, Quanta’s CEO, commented, “We are disappointed with A.M. Best’s decision. We believe that A.M. Best’s actions, while unfortunate, are consistent with their view of the industry in the aftermath of hurricanes Katrina and Rita.
“We have been executing our strategy to develop our specialty insurance and reinsurance businesses throughout 2005. Unfortunately, our results have been overshadowed by the unprecedented frequency and magnitude of the windstorm events over the last two years. The frequency and severity of these events have caused us grave concerns about the prospects for profitability in our technical risk property and property reinsurance lines of business. Accordingly we have determined to take the next few months to conduct an internal analysis of this business and the efficacy of the catastrophe models. Pending the outcome of this analysis, we will discontinue the writing of new business in these areas.
“We continue to work closely with A.M. Best as well as seek their affirmation of our rating at the A- (Excellent) level. To achieve this, we are currently reviewing our capital structure and developing a capital raising plan and we look forward to working with A.M. Best on these initiatives.”
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