AM Best Co. has affirmed Bermuda-based Empyrean Re's financial strength rating of A- (excellent) and has withdrawn the ratings at the company's request.

Empyrean Re chief executive officer Nilesh Vasani told The Royal Gazette yesterday that the decision to have the ratings withdrawn was a strategic one and was part of a confidential process.

Empyrean, which is part of the Man Group, is a trade credit reinsurer which was set up with $150 million of equity capital in 2006.

"We have maintained a zero loss ratio since our inception and that reflects our leading risk management capabilities," Mr. Vasani said.

AM Best also affirmed Empyrean's issuer credit rating of "a-". The outlook for all ratings is stable.

The New Jersey-based rating agency said Empyrean's ratings were based on its excellent capitalisation, experienced management team and sound business plan. These strengths are partially offset by the untested start-up nature and the mono-line orientation of the company, Best added.

The ratings consider the company's solid risk-adjusted capital level, which has met A.M. Best's stringent requirements for newly formed companies. No debt is contemplated in the company's business plan.

Empyrean Re operates as a Bermuda-based reinsurer writing direct, reinsurance and retrocessional trade credit coverage produced through the broker market. Best said indications of market acceptance are positive following the company's second year of operations, the ability of Empyrean Re to effectively build and establish a successful market presence can only be proven over time.

While Empyrean Re is effectively implementing its business plan, AM Best recognises the continued execution risk inherent in the start-up of a specialist reinsurance company that writes only one line of business. A.M.

Best also views any concentration of invested assets as a source of potential problems. However, these concerns are partially mitigated by the experience of the management team, as well as the low underwriting leverage contemplated in Empyrean Re's business plan and the anticipated support of its owner and sponsor, Man Group plc. Man Group plc is a publicly traded global provider of alternative investment products and a constituent of the FTSE 100.