Printer Friendly
The Free Library
4,489,891 articles and books
Member login
User name  
Password 
 
Join us Forgot password?

A.M. Best Assigns Ratings to Markel Corporation's Shelf Registration.


Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 3, 2001

A.M. Best Co. has assigned indicative ratings of "bbb" for senior debt, "bbb-" for subordinated debt and "bb+" for preferred securities to Markel Corporation's (NYSE - MKL MKL - Jackson, TN, USA - McKellar Field (Airport Code)
MKL - Math Kernel Library (Intel)
MKL - Much Klown Love
MKL - Multi-space Karhunen-Loeve (transform)
) recently filed $475 million shelf registration.

A.M. Best has affirmed the current debt and preferred stock ratings of Markel, while the financial strength ratings of the insurance subsidiaries remain unaffected. A.M. Best expects that any securities issued under the shelf registration will be used to reduce debt, refinance existing debt and for general corporate purposes.

The ratings reflect the historically strong operating performance and capitalization of Markel's U.S. operations. The ratings also consider Markel's high level of financial leverage, the weakened financial condition of Markel International (formerly known as Terra Nova Insurance (UK) Holdings plc.), and the increased dependence upon Markel's U.S. operations to service the debt obligations of the holding company over the near-term. Finally, the ratings take into account management's commitment and A.M. Best's expectation that financial leverage will be reduced significantly over the near-term, favorably impacting interest coverage and reducing the burden on the North American operations to service the obligations of Markel Corp.

During 1999 and 2000, the capital position of Markel International declined significantly due to adverse loss reserve development, a high level of severe weather related losses, charges associated with discontinued operations and a write-down of deferred acquisition costs. A.M. Best expects that, over the near-term, Markel International will continue to be challenged by the inadequate pricing and weak underwriting controls that existed under the former management team, which have impacted both the continuing and discontinued operations.

The corrective actions recently taken by management are expected to bring Markel International's balance sheet strength and operating performance more in-line with that of its core operations over the longer-term. These actions include re-underwriting the continuing programs, eliminating programs that are unable to generate adequate margins and implementing strong underwriting controls and standards.

The ratings are also supported by the U.S. operation's strong level of capitalization, solid position within the specialty lines market and consistently strong operating results. The U.S. operations have benefited from management's conservative underwriting and reserving philosophy coupled with strong risk management techniques, which have produced consistently strong operating results. Additionally, the statutory capital position of the U.S. operations is enhanced by significant economic value embedded within its loss reserves, which have been amassed through consistently conservative reserving practices.

Markel Corp., based in Glen Allen, Va., markets and underwrites specialty insurance products and programs to a variety of niche markets on both an admitted and excess & surplus lines basis. These products and programs are marketed through affiliated as well as unaffiliated agents and brokers. As of September 30, 2000, Markel Corp. reported total assets of $5.3 billion and equity of $690.8 million. The following indicative ratings have been assigned to Markel's shelf registration:

- Markel Corporation:

senior debt of "bbb";

subordinated debt of "bbb-";

preferred securities of "bb+".

The following debt and preferred stock ratings have been affirmed:
- Markel Corporation: senior debt rating of "bbb";

- Markel International plc: senior debt ratings of "bbb";

- Markel Capital Trust I: preferred securities rating of "bb+".


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.
COPYRIGHT 2001 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Geographic Code:1USA
Date:Jan 3, 2001
Words:567
Previous Article:Pinnacle Systems to Integrate Taalee Semantic Tools.
Next Article:Home Director Demonstrates Unique Software Applications for Home Networks; Anywhere, Anytime Access to the Home Network With Any Web-enabled Device,...
Topics:



Related Articles
A.M. Best Affirms the Financial Strength, Senior Debt And Preferred Ratings of Markel Corp.
A.M. Best Lowers Financial Strength Ratings of Markel International.
A.M. Best Lowers Financial Strength Ratings of Markel International; Lowers Senior Debt and Preferred Stock Ratings of Markel Corp.
S&P Removes from WatchNeg and Lowers Markel.
Fitch Affs Markel's Insurance Rtgs; Removes Debt From Watch Neg.
Fitch Assigns Its `BBB' Rating To Markel Debt Issue.
A.M. Best Assigns a Senior Debt Rating to Markel Corporation's Convertible Senior Bonds.
S&P Rates Markel Corp.'s $100M Debt Issue 'BBB-'.
A.M. Best Affirms Ratings for Markel North America and Markel Corporation; Downgrades Terra Nova and Markel International.
A.M. Best Assigns Debt Rating to Markel Corporation; Affirms Existing Debt.

Terms of use | Copyright © 2008 Farlex, Inc. | Feedback | For webmasters | Submit articles