Best Affirms Ratings of Beazley Insurance Company, Inc.

December 22, 2011

A.M. Best Co. has affirmed the financial strength rating of ‘A’ (Excellent) and issuer credit rating of “a” of Beazley Insurance Company, Inc. (BICI), which is based in Farmington, Conn. The outlook for both ratings is stable.

These ratings reflect BICI’s “solid stand-alone risk-adjusted capitalization, in addition to the extensive explicit support provided through quota share reinsurance agreements with Lloyd’s Syndicate 3623, which is managed by Beazley plc, Best explained. “BICI also benefits from third party credit risk protection provided by Beazley. Given the explicit support in place, BICI receives partial rating enhancement.

As a partial offsetting factor, Best cited the “the challenges BICI has faced in its initial years in operation while trying to establish itself in the very competitive specialty commercial insurance marketplace.

“These challenges have led to BICI falling short of its projected premium production and/or profitability targets in recent years.” Best added that it “expects BICI to continue utilizing established Beazley underwriting principles and strategies to build its book of business.”

In addition the report said that, although Best “does not expect a positive rating action in the near future, factors that may lead to a positive rating action include a sustained improvement in operating performance and risk-adjusted capitalization at Beazley.

“Factors that may lead to a negative rating action include a decline in risk-adjusted capitalization, a significant weakening of operating performance or deterioration in Beazley’s reserves.

“Furthermore, any upward or downward movement in the rating of the Lloyd’s market, given its implications on Lloyd’s Syndicate 3623, or a perceived lessening of support provided by Beazley would also influence BICI’s rating.”

Source: A.M. Best

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