A.M. Best Co. announced that it has placed the financial strength rating (FSR) of “A” (Excellent) and issuer credit ratings (ICR) of “a” of the reinsurance subsidiaries of Bermuda-based Platinum Underwriters Holdings, Ltd. under review with negative implications. Best also placed the ICR of “bbb” of Platinum and all of the group’s debt ratings under review with negative implications.
“These rating actions follow Platinum’s recent announcement that it has recognized $135 million in after tax losses stemming from Hurricane Wilma,” said Best. “The group’s lead operating company, Platinum Underwriters Bermuda, Ltd. (Platinum Bermuda), which assumes a significant amount of business from the group’s other operating companies, has realized a disproportionate reduction in its capital position as a result of Hurricane Wilma. Intercompany reinsurance arrangements designed to protect Platinum Bermuda’s capital were not sufficient to address the frequency of hurricanes experienced in 2005.”
Best said it would “meet with Platinum’s management in the near term to review Platinum’s plan to strengthen the group capital and to specifically address the capital allocation issues between the group’s affiliate companies.”
Best gave the following details: The FSR of “A” (Excellent) and ICRs of “a” have been placed under review for the following reinsurance subsidiaries of Platinum Underwriters Holdings, Ltd.:
— Platinum Underwriters Reinsurance, Inc.
— Platinum Re (UK) Limited
— Platinum Underwriters Bermuda, Ltd.
The ICR of “bbb” has been placed under review for Platinum Underwriters Holdings, Ltd.
The following debt ratings have been placed under review:
Platinum Underwriters Finance Inc.—
— “bbb” on $137.5 million 6.371 percent senior notes, due 2007
— “bbb” on $250 million 7.50 percent senior notes, due 2017
The following indicative ratings assigned to debt securities available under the shelf registration have been placed under review:
Platinum Underwriters Holdings, Ltd.—
— “bbb” on senior unsecured debt
— “bbb-” on subordinated debt
— “bb+” on preferred stock
Topics Underwriting Reinsurance
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