A.M. Best Affirms Ratings of Validus Reinsurance, Ltd., Validus Reinsurance (Switzerland) Ltd. and Validus Holdings, Ltd.
March 12 2015 - 4:34PM
Business Wire
A.M. Best has affirmed the financial strength rating of A
(Excellent) and the issuer credit rating (ICR) of “a” of Validus
Reinsurance, Ltd. (Validus Re) (Bermuda) and Validus
Reinsurance (Switzerland) Ltd. (VRS) (Zurich, Switzerland).
Additionally, A.M. Best has affirmed the ICR of “bbb” and debt
ratings of the parent company, Validus Holdings, Ltd.
(Validus Holdings) (Bermuda) (NYSE:VR). The outlook for all ratings
is stable. (See below for a detailed listing of debt ratings.)
The ratings reflect Validus Re’s strong risk-adjusted
capitalization, solid operating performance, since inception and
through varying market conditions, experienced management team,
excellent enterprise risk management program and prudent operating
strategies. The company's consistent positive operating results
demonstrate the capability of producing results that are at the
high end of its peer group. Validus has the expertise and capacity
to write diverse books of business globally and is well-positioned
to successfully manage through the current competitive market
environment. Further supporting the ratings of the group is that
the ultimate parent, Validus Holdings, can provide financial
flexibility as a publicly traded company on the New York Stock
Exchange.
Partially offsetting these strengths are the company's exposure
to high severity events as a property catastrophe-focused reinsurer
and the increased competition from capital markets in this space.
However, the company's risk-adjusted capital remains at levels that
have been stress tested to absorb significant catastrophe losses
mitigating this concern. Additionally, Validus Holdings has
enhanced the business profile of the group by diversifying the
company's revenues to include other lines of business, spreading
risk exposures geographically and expanding its distribution
channels, which has increased its client base and scale. The stable
outlooks reflect A.M. Best's expectation that the group will
continue to produce favorable long-term operating results and
maintain excellent risk-adjusted capitalization, which remains
supportive of its current rating levels.
Rating factors that could lead to an upgrading of the ratings
and/or a positive outlook would be the continuation of long-term,
consistently strong operating profitability relative to Validus
Re's peer group and maintaining strong risk-adjusted capital
levels. Rating factors that could lead to a downgrading of the
ratings and/or a revision of an outlook to negative include
outsized catastrophe or investment losses relative to its peer
group, unfavorable operating profitability trends and a significant
decline in risk-adjusted capital that would not be supportive of
the current rating levels.
The following debt ratings have been affirmed:
Validus Holdings, Ltd.— -- “bbb” on $250 million 8.875%
senior unsecured notes, due January 2040
The following indicative ratings for securities available under
the shelf registration have been affirmed:
Validus Holdings, Ltd.— -- “bbb” on senior unsecured
debt-- “bbb-” on subordinated debt-- “bb+” on preferred stock
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. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
• Catastrophe Analysis in A.M. Best Ratings
• Rating Members of Insurance Groups
• Insurance Holding Company and Debt Ratings
• Risk Management and the Rating Process for Insurance
Companies
• Understanding Universal BCAR
This press release relates to rating(s) that have been
published on A.M. Best's website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please visit A.M.
Best’s Ratings & Criteria Center.
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 © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best CompanyGale Guerra, (908) 439-2200, ext.
5069Senior Financial
Analystgale.guerra@ambest.comorGreg Reisner, (908) 439-2200,
ext. 5224Managing Senior Financial
Analystgreg.reisner@ambest.comorChristopher Sharkey, (908)
439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, (908)
439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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