A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of Platinum Underwriters Bermuda, Ltd. and its strategic affiliate Platinum Underwriters Reinsurance, Inc. Best also affirmed the ICR of “bbb” of Platinum Underwriters Holdings, Ltd. and the debt ratings of Platinum and Platinum Underwriters Finance, Inc.
The outlook for all of the ratings is stable.
The ratings reflect the group’s “excellent capitalization, consistently strong operating results and well-established business position as a global, multiline provider of reinsurance coverages,” said Best. The ratings also reflect the group’s “good financial flexibility, stable management team and sound enterprise risk management capabilities. Financial leverage for Platinum has been moderate with debt to total capitalization in the low double digits. The three-year rolling fixed charge coverage is commensurate with the assigned ratings.”
As partial offsetting factors Best cited the “challenges that have occurred in the global reinsurance market including several significant catastrophes over the past several months. While first-quarter 2011 results for the reinsurance sector, including Platinum’s, were negatively impacted by the global catastrophes, Platinum’s financial results were in line with Best’s expectations.”
In addition Best noted that “rate softening, particularly in casualty lines of business, which has been deteriorating for some time, has made it difficult to find new areas for profitable growth. However, Platinum has a strong focus on underwriting discipline and active cycle management, which is evidenced by the company’s substantial reduction in premium volume over the past five years. This should help insulate the company from the potential for future underwriting losses and place the company in a strong position to participate in future market opportunities.”
Best summarized the debt ratings affected as follows:
Platinum Underwriters Finance, Inc.—(guaranteed by Platinum Underwriters Holdings, Ltd.)
— “bbb” on $250 million 7.50 percent senior unsecured notes, due 2017
The following indicative ratings available under the shelf registration have been affirmed:
Platinum Underwriters Holdings, Ltd.—
— “bbb” on senior unsecured debt
— “bbb-” on subordinated debt
— “bb+” on preferred stock
Source: A.M. Best
Topics Underwriting Reinsurance
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