agencies last week.

Duff & Phelps Credit Rating Co. (DCR) assigned a preliminary claims paying ability rating of `A' (Single-A) to Annuity Re, as the Bermuda-based reinsurance firm will be known.

And AM Best Co. assigned the company an `A-' (Excellent) rating on the completion of its IPO.

As a startup company, DCR said Annuity Re's rating was based on: The quality of its management team and Board of Directors, adding that chief executive officer Lawrence Doyle has 32 years of experience in the insurance and reinsurance industries with extensive international and Bermuda experience; The strength of its expected initial capitalisation of $275 million as a result of the initial public offering and private equity investments from other sources; The strategic advantage Annuity Re will have to offer reinsurance coverage at substantially lower cost than its competitors due to its status as a Bermuda company; The overall viability of the Company's strategic business plan, conservative investment guidelines, stringent underwriting guidelines, absence of debt financing in the capital structure, relatively low-risk product offerings, and low-cost operating structure; and The growing demand for life and annuity reinsurance.

As with any startup operation, the rating outlook is less certain than with a company with an operating history. Though Annuity Re's business plan appears viable, and the management team appears capable of its effective execution, there are no guarantees the company will be successful in developing its books of business according to plan.

AM Best also credited the management team's experience in similar start-ups and the fact that the company would be able to build its business by exploiting the business relationships which already existed through its directors and investors.

But it noted the company had been given a "minus'' because of the "uncertainty associated with the start-up nature of the company's operations''.

SOLID MANAGEMENT -- Lawrence Doyle