A.M. Best Co. has assigned an issuer credit rating (ICR) of “bbb” to Global Indemnity plc (Global Indemnity) (Dublin, Ireland) [NASDAQ: GBLI].

A.M. Best also has affirmed the financial strength rating (FSR) of A (Excellent) and ICRs of “a” of Wind River Reinsurance Company, Ltd. (Wind River Re) (Hamilton, Bermuda) and its U.S. subsidiaries. Concurrently, A.M. Best has affirmed the ICR of “bbb” and debt ratings of the intermediate parent holding company, United America Indemnity, Ltd. (UAI) (George Town, Cayman Islands). Global Indemnity is the newly formed ultimate parent holding company of Wind River Re. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)

The ratings reflect the strong capitalization and diversified portfolio of specialty products provided on both an admitted and non-admitted basis by Wind River Re and its U.S. subsidiaries. The ratings also reflect the long-term historical profitability of the U.S. subsidiaries, which began operating under a single pooling agreement as of January 1, 2009, whereby they pool their premiums and liabilities and cede 50% of their combined net retained liabilities to Wind River Re. Wind River Re also continues to build a book of unaffiliated, third-party reinsurance business to complement the affiliated business. At the end of 2009, on a gross basis, the third-party business comprised just over 21% of Wind River Re’s total written premiums, with that proportion expected to increase in 2010.

These positive rating factors are tempered by the combined operating results of the U.S. subsidiaries in recent years, driven by declining premium levels and increased infrastructure investments that have led to an increase in the expense ratio. Global Indemnity’s domestic infrastructure initiatives have included reorganizing geographically to help cultivate more fruitful and productive point-of-sale relationships with its distribution force. A portion of the premium decline is attributable to the planned discontinuation of relationships with agents and brokers that had been producing unsatisfactory results. Additionally, recent reserve releases notwithstanding, management has been very conservative in posting reserves relative to established actuarial estimates. This conservatism has had somewhat of a limiting effect on underwriting results; however, operating results through the first half of 2010 have shown notable improvement.

The FSR of A (Excellent) and ICRs of “a” have been affirmed for Wind River Reinsurance Company, Ltd. and its following subsidiaries:

  • Diamond State Insurance Company
  • Penn-America Insurance Company
  • Penn-Patriot Insurance Company
  • Penn-Star Insurance Company
  • United National Casualty Insurance Company
  • United National Insurance Company
  • United National Specialty Insurance Company

The following indicative ratings have been affirmed under the universal shelf registration:

United America Indemnity, Ltd.—

-- “bbb” on senior unsecured debt

-- “bbb-” on subordinated unsecured debt

-- “bb+” on preferred stock

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition , which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Assessing Country Risk”; and “ A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX