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A.M. Best Upgrades and Assigns Ratings to Majestic Insurance Company; Assigns Ratings to Twin Bridges Ltd. and CRM Holding Companies.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating (FSR) of Majestic Insurance Company (San Francisco, CA) to A- (Excellent) from B++ (Very Good), removed the ratings from under review and assigned an issuer credit rating (ICR) of "a-". Concurrently, A.M. Best has assigned an ICR of "bbb-" and a debt rating of "bb" to the $8 million LIBOR + 4.2% surplus notes, due 2033, of Majestic's parent, Embarcadero Insurance Holdings, Inc. (San Francisco, CA).

A.M. Best has assigned an FSR of A- (Excellent) and an ICR of "a-" to Twin Bridges (Bermuda) Ltd. (Hamilton, Bermuda). Additionally, A.M. Best has assigned an ICR of "bbb-" to Twin Bridges' parent, CRM Holdings Ltd (Hamilton, Bermuda) [NASDAQ: CRMH], and CRM's downstream holding company, CRM USA Holdings, Inc. (Delaware). Concurrently, A.M. Best has assigned a debt rating of "bb" to the $35 million 8.65% junior subordinated debt securities, due 2036, of CRM USA Holdings Inc. The outlook on all ratings is stable.

These rating actions reflect the completed acquisition of Majestic's parent, Embarcadero Insurance Holdings Inc. by CRM Holdings Ltd. The acquisition resulted in a stronger level of capitalization, increased financial flexibility and an enhanced market profile for Majestic, as well as the projected cost savings for Twin Bridges that will be achieved as a result of the combination.

This rating action also reflects the improved profitability and favorable reserve development experienced by Majestic over the last two years.

Offsetting these positive factors is the execution risk involved in joining these two organizations, as well as anticipated new premium growth for both Majestic and Twin Bridges. Further offsetting the positive factors is the relative immaturity of the reserves of the excess workers' compensation business in Twin Bridges, which could develop differently than expected. Additionally, the softening environment in the California workers' compensation market could pose a significant obstacle to the future profitability of the two operating companies.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit

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
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Publication:Business Wire
Date:Nov 16, 2006
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