Days after the successful initial public offering of its parent company, Bermuda’s CastlePoint Reinsurance Company Ltd. has had its financial strength rating affirmed as A- (excellent) by A.M. Best.

CastlePoint Holdings Ltd., which is now trading on the Nasdaq under the symbol CPHL, raised $117 million through its IPO. In addition, the company raised $265 million through a private placement offering in April last year.

“The affirmation of CPRe’s ratings reflect its strong risk-adjusted capitalisation, historically profitable core book of businesses assumed from Tower Group, Inc. (New York) and its experienced management team,” Best said in a statement yesterday.

“Additionally, through the first year of operations, CPRe operated within the parameters of the business plan presented to A.M. Best during last year’s initial rating process. In 2007, CPRe increased its third-party assumed writings on the January 1 renewal date, but CPRe still derives the majority of its business from Tower.”

Best pointed out that CPRee was likely to face increasing competition for market share from both new entrants and established carriers.

“Somewhat offsetting these rating strengths are CPRe’s revenue concentration, which could lead to potential correlation risk, execution risk in meeting its five-year business plan and the risks associated with accurately pricing new business,” Best added.

Around 9 percent of CastlePoint Holdings’ shares are owned by Tower.