Ratings: Max Capital, Flagstone Re (Africa), VIG RE, Alliance, Syndicate 1414

Standard & Poor’s Ratings Services has affirmed its ‘BBB-‘ counterparty credit ratings on Max Capital Group Ltd. and Max USA Holdings Ltd. The outlook on both companies remains positive. “The counterparty credit rating on Max Capital reflects its good competitive position as a diversified insurance and reinsurance company, its strong underwriting performance, and its adequate enterprise risk management,” explained credit analyst Pablo Feldman. “Weaknesses include Max Capital’s limited scale and market presence, diminishing capital adequacy, and concentration within Fortune 1000 accounts, which is diminishing with the expansion of the U.S. excess and surplus business and Lloyd’s presence.” S&P also said the rating is based on Max Capital’s low leverage, good financial flexibility, and flexible dividend-paying capacity with its Bermuda domicile. These characteristics will remain consistent in the next few years. Max Capital’s financial flexibility, like its peers’, is slightly limited because of the current financial market disruption.”

A.M. Best Co. has assigned a financial strength rating (FSR) of ‘A-‘ (Excellent) and an issuer credit rating (ICR) of “a-” to Flagstone Reinsurance Africa Limited, both with stable outlooks. ” The ratings reflect the company’s anticipated strong prospective risk-adjusted capitalization in addition to explicit support provided by its parent, Flagstone Reassurance Suisse SA,” said Best. “Offsetting factors include the execution risks associated with the business plan of any rapidly growing company, the existing competitive South African reinsurance market and the small current and prospective company profile within it.” Best also noted that the “support provided by the Flagstone Suisse parent is fundamental to the ratings assigned to Flagstone Re Africa. The support comes in the form of an extensive reinsurance program, including a 75 percent quota share agreement on all lines of business, along with a contractual agreement guaranteeing all liabilities of the Flagstone Re Africa subsidiary.”

Standard & Poor’s Ratings Services has assigned its ‘A+’ insurer financial strength and counterparty credit ratings to Czech-based VIG RE zajišt’ovna a.s. (VIG RE) with a stable outlook. “The ratings on VIG RE reflect its core status to Austria-based Wiener Staedtische Versicherung AG Vienna Insurance Group,” explained credit analyst Ralf Bender. S&P noted that “Wiener Staedtische Versicherung AG Vienna Insurance Group (VIG; A+/Positive/–) is VIG RE’s parent and core operating company. VIG RE forms an integral part of VIG’s risk-management strategy and will be equipped with at least strong capitalization. The company predominantly writes business emanating from the group and maintains a comprehensive reinsurance program. VIG RE’s investment strategy is focused on conservative and liquid asset classes. The stable outlook reflects both the current rating and the outlook on VIG, and the influence of the sovereign rating on its domicile, Czech Republic (foreign currency A/Stable/A-1; local currency rating A+/Stable/A-1). Bender added that the “ratings could be lowered if VIG RE’s third-party reinsurance business, which we see as a noncore activity, exceeded 20 percent of its gross premium income.”

A.M. Best Co. has affirmed the financial strength rating of ‘A-‘ (Excellent) and issuer credit rating of “a-” of Alliance Insurance (PSC). The Company is based in Dubai, United Arab Emirates. The outlook for both ratings is stable. Best said the “ratings reflect the company’s strong liquidity, stable underwriting performance and strong risk-adjusted capitalization. This is partially offset by high reinsurance dependence on the non-life segment, as is typical with other insurers in the region, equity volatility exposure
and lack of diversification in the investment profile. Alliance has an excellent risk-adjusted capitalization that factors a strong capital and surplus base and positive results from a high focus of assets in fixed income bank deposits.”

A.M. Best Co. has affirmed its Syndicate Rating of ‘A’ (Excellent) and issuer credit rating (ICR) of “a+” of Lloyd’s Syndicate 1414, which is managed by Ascot Underwriting Limited. “The rating continues to reflect the financial strength of the Lloyd’s market, which underpins the security of all Lloyd’s syndicates,” Best noted. The outlook for both ratings remains stable. Concurrently, Best withdrew the ratings at the Syndicate’s request and assigned an NR-4 to the Best’s Syndicate Rating and an “nr” to the ICR.