A.M. Best Co. has removed from under review with developing
implications and affirmed the financial strength rating of A-
(Excellent) and issuer credit ratings (ICR) of "a-" of Flagstone
Reassurance Suisse S.A. (Martigny, Switzerland) and Flagstone
Alliance Insurance and Reinsurance PLC (Limassol, Cyprus) (together
known as Flagstone Re). The outlook assigned to these ratings is stable.
A.M. Best also has withdrawn the ICR of "bbb-" of Flagstone
Reinsurance Holdings S.A. (Flagstone Holdings) (Luxembourg), given
its change in status to an intermediate holding company of Validus
Holdings, Ltd. Concurrently, A.M. Best has withdrawn the indicative
ratings of "bb" on preferred stock, "bb+" on subordinated debt and
"bbb-" on senior debt of Flagstone Holdings as the securities available
under its shelf registration are no longer in existence.
The ratings reflect Flagstone Re's excellent level of risk-based
capitalization on a stand-alone basis, as well as the commitment and
experience of the management team at Validus Reinsurance Ltd.
(Validus Re) in the successful and orderly integration of the acquired
business operations. The rtings also recognize the significant remedial
actions taken by the former management of Flagstone to streamline the
organizational structure, de-risk the balance sheet and significantly
reduce overall expenses. The stable outlook reflects A.M. Best's opinion
that Flagstone Re's policyholders are in a more secure position
following the change in ownership to Validus Re. Validus Re has
displayed an historically strong operating performance, capitalization
and a strong enterprise risk management program, which will inure to the
benefit of Flagstone Re's policyholders. Financial forecasts indicate a
continuation of strong risk-adjusted capital levels, which are further
enhanced by the support provided by Validus Re.
Given the current position of Flagstone Re as an inactive underwriter,
it is unlikely that the ratings will be upgraded. Rating factors that
could lead to a negative outlook would be the result of any negative
changes in Validus Re's ratings.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a
comprehensive explanation of A.M. Best's rating process and contains the
different rating criteria employed in the rating process. Key criteria
utilized include: "Risk Management and the Rating Process for Insurance
Companies"; "Understanding Universal BCAR"; "Catastrophe Analysis in
A.M. Best Ratings"; "Insurance Holding Company and Debt Ratings"; and
"Rating Members of Insurance Groups." Best's Credit Rating Methodology
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
[ Back To NFVZone's Homepage ]