AM Best has affirmed the A (excellent) financial strength rating for the reinsurance subsidiaries of Inter-Ocean Holdings, Bermuda. The outlook has been revised from stable to negative.
It said the affirmation applied to Inter-Ocean Reinsurance Company, Bermuda, and Inter-Ocean Reinsurance, Ireland.
AM Best said the rating reflected the group's strong risk-adjusted capitalisation, non-risk retaining operating structure and the support it receives through strategic relationships with its sponsoring shareholders.
Offsetting factors in the rating were the lowering of the credit ratings of come of the company's most active retrocessionaires, and AM Best's view that the risk-adjusted capital position of the group had diminished over the past two years as the company's credit exposures have continued to accumulate.
The ratings agency said the negative outlook reflected its concern that at its current rating level, the group's relatively modest level of shareholders' equity would not be adequate to support further increases in its credit exposure or rating downgrades of its principal retrocessionaires.
