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A.M. Best Affirms ICR of Brit Insurance Holdings B.V., Removes from Under Review and Withdraws Rating

LONDON--(BUSINESS WIRE)-- A.M. Best Europe – Rating Services Limited has affirmed the issuer credit rating (ICR) of “bbb” of Brit Insurance Holdings B.V. (Brit Insurance) (Netherlands), the ultimate parent of the Brit Insurance group of companies. The rating has been removed from under review with negative implications. At the same time, A.M. Best has removed from under review and affirmed the debt rating of “bbb-” on the GBP 135 million 6.710% fixed rate subordinated notes due 12 September 2030, originally issued and guaranteed by the intermediate holding company Brit Insurance Holdings Limited (United Kingdom), and now an obligation of Brit Insurance. The outlook for all ratings is stable. Subsequently, A.M. Best has withdrawn the rating of Brit Insurance and the associated debt rating, as the company has requested to no longer participate in A.M. Best’s interactive rating process.

The rating actions follow the completion of the sale of the group’s UK company market insurer, Brit Insurance Limited (BIL) to RiverStone Holdings Limited, an indirect subsidiary of Fairfax Financial Holdings Limited. Going forward, Lloyd’s Syndicate 2987 will be the Brit Insurance group’s sole source of third party premium income. The capital provider and managing agent of syndicate 2987 are subsidiaries of Brit Insurance.

Brit Insurance is expected to maintain risk-adjusted capital at a level that supports its ratings. Following a reduction in underwriting risk due to the sale of BIL, the group is expected to pay a material one-off dividend in 2012.

Prospective performance is expected to be good and will principally reflect the performance of syndicate 2987. The syndicate has a weighted average combined ratio of 94% for the period 2007-2011.

Brit Insurance benefits from a good profile in the Lloyd’s market through syndicate 2987, which writes a well-diversified account of direct and reinsurance property and casualty business.

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 utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal BCAR”; “Rating Members of Insurance Groups”; “Catastrophe Analysis in A.M. Best Ratings”; “Equity Credit for Hybrid Securities”; and “Insurance Holding Company and Debt Ratings.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. 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.

A.M. Best Company, Inc.
Mathilde Jakobsen, +(44) 20 7397 0266
Senior Financial Analyst
mathilde.jakobsen@ambest.com
or
Catherine Thomas, +(44) 20 7397 0281
Director, Analytics
catherine.thomas@ambest.com
or
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Company, Inc.