A.M. Best Co. has downgraded the financial strength rating to “B” (Fair) from “B++” (Very Good) and the issuer credit rating to “bb” from “bbb” of the insurance and reinsurance operating subsidiaries of the Bermuda-based Alea Group Holdings Ltd. (collectively referred to as Alea Group or Alea).
The rating changes apply to Alea London Limited, Alea (Bermuda) Limited, Alea Europe Limited, Alea North America Insurance Company, Alea North America Specialty Insurance Company, Alea Global Risk Limited and Alea Jersey Limited.
“The outlook for all ratings remains negative,” said Best. It then announced that it has “withdrawn all ratings and has assigned an “NR-4″ (Company Request) to the Alea Group companies.”
Best explained: “The downgrade follows significant deterioration in the company’s consolidated risk-adjusted capitalization as a result of worse than anticipated performance in 2005 due to run-off charges, catastrophe losses and further adverse reserve development. A.M. Best believes that the company is likely to continue to be affected by high expenses related to the transition of Alea Group into run off and the continuing possibility of adverse reserve development.”
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