A.M. Best Affirms Ratings of Odyssey Reinsurance Group and Odyssey Re Holdings Corp.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 the issuer credit ratings of "a" 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 (Odyssey Re) (Delaware) and its members. Additionally, A.M. Best has affirmed both the 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. and debt ratings of Odyssey Re Holdings Corp. (Odyssey Re Holdings) (Delaware) [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) ]. The outlook for all ratings is stable. (See below for a detailed list of the companies and ratings.) The ratings reflect Odyssey Re's strong capitalization, relatively favorable operating performance and sound business position. Odyssey Re is a global underwriter of reinsurance and specialty insurance products and ranks among the top 15 global reinsurance groups in terms of premium volume. Odyssey Re's competitive position benefits from its diversified market presence with regard to business mix, product offering and geographic bearing. With the absence of significant catastrophe activity in 2006, Odyssey Re reported a statutory combined ratio of 96.0% and a solid pretax return on revenue of 15.1%. Operating momentum has continued through the current year as Odyssey Re reported net income for the first six months of 2007 of $273 million. In addition to good underwriting results, an astute investment management philosophy emphasizing a total return strategy enhances overall earnings. The ratings also recognize Odyssey Re Holdings' proven financial flexibility, strong interest coverage measures and moderate financial leverage, as debt-to-total capital as of June 30, 2007 was approximately 17.3%. Although Odyssey Re's public float of common shares is somewhat constricted con·strict v. con·strict·ed, con·strict·ing, con·stricts v.tr. 1. To make smaller or narrower by binding or squeezing. 2. To squeeze or compress. 3. given Fairfax Financial Holdings Fairfax Financial Holdings Limited TSX: FFH.SV NYSE: FFH is a Toronto, Ontario based financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims Limited's (Canada) 58.7% ownership, Odyssey Re has successfully utilized the capital markets to raise capital. Somewhat offsetting these rating strengths are continued exposure to adverse loss reserve development from prior accident years and financial reporting issues arising from 2005 and prior, which were fully remediated in 2006 as a result of enhanced internal controls. Although adverse reserve development has impacted operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in recent years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time overall percentage of adverse development to total loss reserves continues to moderate, as favorable loss reserve development attributed to more recent accident years has tempered the impact of adverse loss reserve development on accident years 1997-2001. A.M. Best also has concerns regarding market conditions including pricing deterioration in most property/casualty lines and emerging competitive threats. Although softening market conditions will have an effect on underwriting margins in the coming years, A.M. Best believes that Odyssey Re's diversified business and its total return investment philosophy has positioned it well to manage softening market conditions. In A.M. Best's opinion, Odyssey Re has made significant progress in building a holistic enterprise risk management framework, and A.M. Best will monitor the group's progress. The FSR of A (Excellent) and the ICRs of "a" have been affirmed for Odyssey Reinsurance Group and its following members: * Odyssey America Reinsurance Corporation * Hudson Insurance Company * Hudson Specialty Insurance Company * Clearwater Insurance Company * Newline Insurance Company Limited The ICR of "bbb" has been affirmed for Odyssey Re Holdings Corp. The following debt ratings have been affirmed:
Odyssey Re Holdings Corp.--
-- "bbb" on $225 million 7.65% senior unsecured notes, due 2013
-- "bbb" on $125 million 6.875% senior unsecured notes, due 2015
-- "bb+" on $50 million of series A perpetual non-cumulative
preferred stock
-- "bb+" on $50 million of series B perpetual non-cumulative
preferred stock
The following indicative 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. 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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