One of Bermuda's leading insurers, BF&M Ltd, has been given a top rating of "excellent" by a US ratings agency.

A.M. Best Co., the world's oldest and most authoritative insurance rating agency, has assigned an "A minus (Excellent) " rating to BF&M Limited, the company announced yesterday.

The ratings are considered important by businesses as they are used as a guide for investors on what companies are sound to invest in.

The ratings are done after stringent analysis of the company's financial viability and the strength of its management and structure.

President and Chief Executive Officer of the BF&M Companies, Glenn Titterton, said: "I am delighted that BF&M Limited has been rated as "excellent" by A.M. Best. Our customers will have recognised the strength of our companies for some time, but it is gratifying to have this financial strength acknowledged by an independent organisation with the international reputation of A.M. Best."

In part, A.M. Best cite BF&M's "consistent operating performance, diversified business profile, secure capitalisation and experienced and focused management."

Best points out that "management is experienced, focused and typical of a larger enterprise" and they say that "together, these advantages bring considerable strength and security for the benefit of the policyholders."

The report also said that Bermuda has limited prospects for growth as an insurance market. It possesses a generally high level of existing insurance coverage and significant competition among local and international insurers.

Also, it said the Bermuda economy is stable, having made inroads into international financial services and away from its historical dependence on tourism.

Accordingly, it said growth for BF&M Limited will be challenging to achieve and premium rates are likely to remain under some pressure.

The report added that in 1999, BF&M Limited settled litigation over its exposure to the London market, for which it accrued settlement and legal expenses totalling $35 million. It funded this obligation through a combination of investment sales and a bank loan.

Although the dispute was a distraction to management and a source of considerable expense, A.M. Best views it as essentially unrelated to BF&M Ltd's continuing business. The only continuing effect is the manageable cost of servicing the bank loan.

Mr. Titterton said yesterday that BF&M was building on its strong financial base and experienced management to make exciting advances. He pointed to BF&M's customer focus and substantial lead in e-commerce and noted that new products and services were being rolled out on a continuing basis.

BF&M recently introduced Bermuda's a new advanced health insurance plan, the Global Health Series, offering real alternatives to employees who can choose from nine alternatives, rather than accept a "one size fits all" policy.

The company has also gone into e-business with its own web site and ability to renew some insurance online.

Other initiatives include 60 percent owned subsidiary Barr's Bay Properties Limited, which is building a new five floor office building on Pitt's Bay Road, starting in 2002.

Mr. Titterton said: "BF&M is well positioned to meet the challenges ahead and we look to the future with great enthusiasm."

BF&M shares yesterday closed unchanged at $8.25.