A.M. Best Places Ratings for Overseas Partners Under Review.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 13, 2002 A.M. Best Co. has placed the financial strength ratings of A (Excellent) for the insurance operating subsidiaries of Overseas Partners Ltd. (OPL OPL Open Publication License OPL Olympus Product Line (Sun) OPL outer plexiform layer OPL Organiser Programming Language (PSION) OPL On-Premise Laundry OPL Optical Path Length OPL Open Public License ), Bermuda, under review with negative implications. The ratings apply to Overseas Partners US 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. Company (OPUS), Wilmington, Delaware Wilmington is the largest city in the state of Delaware and is located at the confluence of the Christina River and Brandywine Creek, near where the Christina flows into the Delaware River. , Overseas Partners Re Limited (OP Re), Overseas Partners Cat Limited (OPCat) and Overseas Partners Assurance Ltd. (OPAL opal (ō`pəl), a mineral consisting of poorly crystalline to amorphous silica, SiO2·nH2O; the water content is quite variable but usually ranges from 3% to 10%. ), all of Bermuda. This action is the result of the recent announcement by OPL's board of directors that it will begin an orderly runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. of most of its operations. Specifically, OP Re and OPAL will be placed into runoff while a buyer is sought for OPUS. Additionally, the company has reached an agreement with Renaissance Re, who currently underwrites and assumes 50% of OPCat business, to now assume 100% of this business. OPL's board of directors has taken these actions in the wake of strides that had been made over the last two years to improve the company's operations. These strides had included the installation of a new management team and their initiatives to significantly strengthen loss reserves, exit from unprofitable classes of business and focus of operations on a limited number of specialty lines. Despite these efforts and A.M. Best's expectation of significant rate hardening in the reinsurance marketplace, OPL's board of directors is averse a·verse adj. Having a feeling of opposition, distaste, or aversion; strongly disinclined: investors who are averse to taking risks. to deploying its capital to support growth at the expense of the short-term liquidity requirements of the shareholders. Currently, shareholders are dependent on stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. programs and shareholder dividends to realize value from their investments. Management had ceased the stock buyback program effective August 2001, and recently announced its intent to eliminate shareholder dividend payments to preserve its capital base. The ratings will remain under review pending A.M. Best's completion of its review of the strategic and capital restructuring of the group to separate runoff operations from ongoing business segments, the assumption of OPCat's business by Renaissance Re and the full impact--including legal and regulatory--on each entity's policyholder base. A.M. Best views the overall capitalization of the group--with $1.3 billion shareholders equity--as adequate to support its obligations, reflecting the fact that two independent actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin opinions have confirmed the adequacy of its loss reserves. Nonetheless, upon completion of the review, it is likely that A.M. Best will lower the ratings of both the active and inactive operations, reflecting the significant change in their operational structure and the potential risks associated with these changes. 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. |
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