Alterra rating downgraded to negative by Best
Alterra Capital Holdings Ltd’s credit rating outlook has been dropped to negative from stable by AM Best after the Bermuda company announced the departure of the leader of its reinsurance operations.
John Berger, has been the reinsurance CEO and a member of the board of directors since Alterra was formed by the combination of Max Capital and Harbor Point Re last year.
The company announced last week that Mr Berger was leaving to pursue another opportunity and would be replaced by Thomas Wafer, promoted from the role of president of Alterra Reinsurance USA.
Best affirmed the A finanBest affirmed the Acial strength rating of Alterra Bermuda Ltd and its operating subsidiaries on Friday, but the negative outlook indicates that a downgrade may be considered in the future.
“Best views this recent announcement as a material change in the management structure, which was initially considered by AM Best at the time of the merger,” the ratings agency stated after the close of US financial markets on Friday, referring to Mr Berger’s impending departure.
“In May 2010, when the ratings were assigned to Alterra and its operating subsidiaries, AM Best gave significant consideration to the organisational structure of the board of directors, the executive management team and the key committees that were established to help steer and execute the strategy of the company.
“AM Best still views these elements to be critical to the organisation and will continue to monitor the development of the company and its operational strategy.”
Best also indicated that it was not too concerned about the abilities of Alterra’s remaining management team to run the re/insurer during the coming months.
“While from AM Best’s perspective the recent change in management has introduced a new level of uncertainty to the organisation in terms of execution and development of future business strategies and retention of other key personnel, AM Best recognises that currently Alterra has a deep bench of talent to draw upon to help lead the organisation over the near term,” the ratings agency’s statement added.
Before joining Alterra, Mr Berger had led Harbor Point as its president and CEO from the company’s formation in Bermuda in 2005, having previously been a founder of Chubb Re.