A.M. Best Affirms Financial Strength and Debt Ratings of Odyssey Re.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 6, 2003 A.M. Best Co. has affirmed the financial strength ratings of A (Excellent) of Odyssey Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Group (Wilmington, DE). In addition, A.M. Best has assigned the financial strength rating of A (Excellent) to Hudson Specialty Insurance Company (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY), a newly purchased reinsured affiliate of Odyssey Re. Concurrently, A.M. Best has affirmed the senior debt ratings of "bbb" as well as all indicative ratings of Odyssey Re Holdings Corp. (Odyssey Re) (NYSE NYSE See: New York Stock Exchange : ORH ORH Worcester (Airport) ORH Operation Restore Hope ORH Worcester, MA, USA - Worcester /James D O'Brien Field (Airport Code) ) (Stamford, CT). The outlook for all ratings is negative. The affirmation of Odyssey Re's ratings reflects excellent and improving stand-alone capitalization, disciplined historical underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance, strong and sustained earnings momentum and its position in the global reinsurance market. These attributes are supported by Odyssey Re's diversified geographic client base, combined with its broad product capability and an opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. business philosophy. Over the past five years, Odyssey Re has reported more favorable underwriting results compared with A.M. Best's professional reinsurers' composite average. Together with an astute investment strategy as well as access to the capital markets, Odyssey Re's risk-adjusted capitalization has been supportive of its significant growth over the past three years. Growth has occurred from robust opportunities emanating from a hard market, market dislocations and capacity shortages in specific global regions. Estimated 2003 projections indicate financial leverage will remain at approximately 20% at the holding company level, supported by fixed charge and cash coverage ratios in the high single digit range, which are well within the acceptable range of its rating category. Somewhat offsetting these positive attributes is Odyssey Re's elevated operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. relative to its peers and the potential for adverse reserve development emerging from its older long-tail casualty reserves and more recently, from its aggressive growth in new business. A.M. Best expects the company to temper and manage its operating leverage at lower levels for the 2004 accident year as it continues to augment its capital position from both internal and external sources. A.M. Best is maintaining a negative rating outlook, which was initially assigned to all of the insurance subsidiaries of its majority owner, Fairfax Financial Holding Limited (Fairfax) (Ontario). The financial strength ratings of A (Excellent) have been affirmed for Odyssey Reinsurance Group and the following members: -- Odyssey America Reinsurance Corporation -- Odyssey Reinsurance Corporation -- Hudson Insurance Company The financial strength rating of A (Excellent) has been assigned to the following reinsured affiliate of Odyssey Reinsurance Group: -- Hudson Specialty Insurance Company The following debt ratings have been affirmed: Odyssey Re Holdings Corp - -- "bbb" on $150 million 7.65% senior debentures/notes, due 2013 -- "bbb" on $110 million 4.375% convertible senior debentures, due 2022 The following indicative debt ratings available under a $400 million shelf registration have been affirmed: Odyssey Re Holdings Corp - -- "bbb" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. -- "bbb-" on subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". -- "bb+" on preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion