Best Affirms, Withdraws Cayman General Rating

A.M. Best Co. announced that it has affirmed the financial strength rating of ‘B-‘ (Fair) of Cayman General Insurance Company Limited, has removed the rating from under review and assigned a negative outlook.

Subsequently, Best said it had “withdrawn the financial strength rating and has assigned a ‘NR-4’ (Company Request). This action has been taken in response to Cayman General management’s request that the company be withdrawn from the interactive rating process.”

Best explained that “Cayman General’s financial strength rating was downgraded to ‘B-‘ (Fair) from ‘A-‘ (Excellent) on December 30, 2004, reflecting the magnitude of the damage caused by Hurricane Ivan and the significant amount of estimated losses affecting Cayman General’s risk-adjusted capital position.” Best had put the ratings under review with negative implications on September 15, 2004, “reflecting the uncertainty surrounding its ultimate exposure to Hurricane Ivan and the potential impact on the company’s capitalization.”

The rating downgrade followed the company’s failure to provide Best with “hurricane loss information and a recapitalization plan,” said the announcement. Best said it had therefore based “its rating action upon industry loss estimates and Cayman General’s market share information. It also warned that “in A.M. Best’s opinion, the company has limited access to the substantial level of additional capital necessary to return Cayman General to the secure rating range.”