Fitch Ratings Affirms Markel, Assigns 'BBB-' To New Debt.Business Editors CHICAGO & LONDON--(BUSINESS WIRE)--Feb. 21, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. today assigned a 'BBB-' rating to the $200 million of ten-year senior notes issued by Markel Corporation (Markel). Fitch fitch: see polecat. also affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the 'A' insurer financial strength ratings of the members of the Markel North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. insurance group, the 'BBB+' insurer financial strength rating of Markel International Insurance Company Ltd. (MIICL) and the 'BBB' insurer financial strength Rating of Terra Nova Terra Nova may refer to: In geography:
Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. rating of Markel Capital Trust. The Rating Outlook for MIICL is Positive. The Rating Outlook for all other ratings is Stable. Markel intends to use the proceeds from the new senior debt issue to retire existing bank debt and senior notes that mature in November 2003. Fitch believes Markel was prudent to arrange its refinancing Refinancing An extension and/or increase in amount of existing debt. in advance of its maturity dates and views the move towards long-term financing Long-term financing Liabilities repayable in more than one year plus equity. positively. These attributes more than offset the temporary increase in financial leverage that results from the issue. The insurance ratings reflect continued strong 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. results in Markel North America and improved underwriting results in Markel International. Markel International consists of MIICL, Markel's London Market insurance company and Markel's operations at Lloyd's. The ratings also positively reflect Markel's conservative accounting and reserving practices, which improve the quality of its earnings. The ratings also consider Markel's moderately high financial leverage, which is approximately 30% when adjusted to give partial equity credit to the trust preferred stock. Further, Markel has moderate exposure to asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. liabilities and added $30 million to its asbestos reserves in 2002. Fitch believes Markel will benefit from continued strong pricing and will continue to report excellent underwriting results in its North America group. The change in Markel International Insurance Company's Rating Outlook to Positive from Stable reflects improved underwriting performance in 2002 and prospects for profitable growth in 2003. In 2002 the capital position of Markel International (the intermediate holding company parent of MIICL) was strengthened and Markel Corporation took further steps towards integrating MIICL into the group, typified by the change of name. Fitch does not yet regard MIICL as core to the Markel group largely as a result of its lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. operating performance and its past need for the strengthening of reserves with regard to old business, most recently in September 2002. Fitch will continue to monitor results at MIICL over the coming quarters to determine the sustainability of the positive results seen in the fourth quarter of 2002. Markel Corporation markets and underwrites specialty insurance products and programs to a variety of niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . In each of these markets, the company seeks to provide quality products and excellent customer service so that it can be a market leader. The ratings affected are listed in the table below. Entity/Issue/Type/Action/Rating Associated International Insurance Co. Deerfield Insurance Company Essex Insurance Company Evanston Insurance Company Markel American Insurance Company Markel Insurance Company -- Insurer financial strength rating Affirmed 'A'; -- Rating Outlook Stable. Markel Corporation -- Senior notes due 2013 Assigned 'BBB-'; -- Long-term issuer rating Affirmed 'BBB-'; -- Senior notes due 2008 Affirmed 'BBB-'; -- Senior notes due 2007 Affirmed 'BBB-'; -- Senior notes due 2003 Affirmed 'BBB-'; -- Liquid Yield Option (TM) Notes due 2031 Affirmed 'BBB-'; -- Rating Outlook Stable. Markel Capital Trust -- Preferred stock Affirmed 'BB+'. Markel International Insurance Company (formerly Terra Nova Insurance Company Ltd.) -- Insurer financial strength rating Affirmed 'BBB+'; -- Rating Outlook Positive. Terra Nova (Bermuda) Insurance Company -- Insurer financial strength rating Affirmed 'BBB'; -- Rating Outlook Stable. |
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