A.M. Best Affirms Ratings of Montpelier Re Holdings Ltd. and Its Subsidiaries.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A- (Excellent) and issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a-" of Montpelier 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. Ltd. (Montpelier) (Hamilton, Bermuda) and Montpelier US Insurance Company (MUSIC) (Oklahoma City, OK). Concurrently, A.M. Best has affirmed the ICR of "bbb-" and all debt ratings of Montpelier Re Holdings Ltd. (Montpelier Re) (Hamilton, Bermuda) [NYSE NYSE See: New York Stock Exchange : MRH MRH Memory Repeater Hub MRH Main Rotor Head (helicopters) MRH Multi-Resolution Homogenization MRH Mastic Roller Hybrid MRH Mataillos Rejuntaos de Hafen (MMO gaming guild) ]. The outlook for all ratings is stable. (Please see below for a detailed listing of the ratings.) These rating actions reflect Montpelier's excellent risk-adjusted capitalization, adequate operating performance and enhanced risk management framework. Partially offsetting these strengths is Montpelier's susceptibility to high severity losses, which is inherent in a global property catastrophe reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. . Additionally, these strengths are tempered by the start-up nature of the affiliated U.S. and U.K. operating platforms. The stable outlook reflects the expectation that Montpelier Re's future performance should benefit from the current operating environment in its property focused book of business and the newer operating platforms will begin to be accretive to overall returns. Montpelier Re produced solid returns in 2006 and 2007, which enabled its balance sheet to withstand the challenges faced during 2008. While 2008 resulted in negative return measures due in part to sizable realized and unrealized investment losses, the company's risk management and strength of its balance sheet kept the impact of these challenges to a controllable level. Furthermore, risk management initiatives implemented in recent years to help contain Montpelier Re's risk profile have proven to be effective as evidenced by the manageable level of incurred losses from the Atlantic hurricanes during 2008. Montpelier Re's current financial leverage measures remain in line with its rating levels, with debt and preferred-to-total equity at approximately 20%. The FSR of A- (Excellent) and ICRs of "a-" have been affirmed for Montpelier Reinsurance Ltd. and Montpelier US Insurance Company. The ICR of "bbb-"has been affirmed for Montpelier Re Holdings Ltd. The following debt rating has been affirmed: Montpelier Re Holdings Ltd.-- -- "bbb-" on $250 million 6.125% senior unsecured notes, due 2013 The following indicative ratings have been affirmed under the shelf registration: Montpelier Re Holdings Ltd.-- -- "bbb-" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. -- "bb+" 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 stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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