A.M. Best has affirmed the financial strength rating of A- (excellent) and issuer credit rating of "a-" of Omega Specialty Insurance Company Limited (Bermuda). The outlook for both ratings remains stable.

The ultimate holding company of Omega group, which re-domiciled Omega Insurance Holdings from London to Bermuda in the second half of 2006, has been given an issuer credit rating of "bbb".

The agency has also affirmed the syndicate rating of A (excellent) and issuer credit rating of "a+" of Lloyd's Syndicate 958 (UK), which is managed by Omega Underwriting Agents Limited.

The outlook for both ratings remains positive, reflecting the positive outlook on the issuer credit rating of Lloyd's of London.

Best has also assigned an issuer credit rating (ICR) of "bbb" to Omega Insurance Holdings Limited (Bermuda), the new ultimate holding company of the Omega group. The outlook on this rating is also positive.

In addition to the financial strength of the Lloyd's market, which underpins the security of all Lloyd's syndicates, syndicate 958 benefits from financial flexibility provided by the Omega group companies, according to Best.The agency believes that Omega Specialty Insurance Company Limited is likely to maintain excellent risk-adjusted capitalisation at year-end 2007 and 2008, supported by robust net retained earnings. The rating also continues to reflect financial flexibility provided by OSIL's ultimate parent company, Omega Insurance Holdings Limited.

For 2007 Lloyd's Syndicate 958 increased its underwriting capacity through a $25 million ($50 million) qualifying quota share from Omega Specialty Insurance Limited in order to write a new marine and energy account.

Best believes syndicate 958 is likely to generate good earnings in 2007 (subject to catastrophe experience) and a strong return on capacity (after personal expenses) in excess of 12 percent for the 2006 year, reflecting favourable claims experience. Despite the impact of the 2005 US hurricane season on syndicate 958's substantial property portfolio, Best believes the syndicate is still likely to produce a solid profit in excess of seven percent for the year.

The syndicate's development of its new marine and energy account follows the re-pricing of this business that occurred due to the 2005 US hurricane season.

Although rates are now beginning to soften in this market, AM Best believes the new energy account increases the diversity within the syndicate's portfolio and will allow the syndicate to take advantage of current strong, albeit weakening, trading conditions.