A.M. Best Co. has assigned an indicative financial strength rating of A- (Excellent) to Danish Re Bermuda Ltd., a global reinsurer which underwrites at Lloyd's as an Integrated Lloyd's Vehicle and through its fully licensed Bermudan risk carrier.

The rating is subject to the full completion of a $200 million private equity placement offer, which is expected by the end of January 2002.

Danish Re's investor, Trident II, L.P., a $1.4 billion private equity fund managed by MMC Capital, Inc., is subscribing to the private offering.

A.M. Best says the rating reflects the company's carefully managed growth since its formation in November, 1999 in anticipation of an upturn in the reinsurance market, excellent prospective capitalisation and strong financial performance and business profile.

A.M. Best says the major rating factors include the company's excellent capitalisation and Danish Re Cayman Holding Limited, the holding company, is to receive a US $200 million capital injection, which A.M. Best expects to be downstreamed to Bermuda.

The additional capital will take Danish Re Bermuda's capital base to approximately $250 million, increasing the underwriting capacity of the group's non-Lloyd's operations whilst benefiting from Bermuda's beneficial tax and regulatory regime.

As a consequence of the capital injection, Danish Re's capitalisation will be consistent with the A- rating.

A.M. Best also pointed to the company's strong operating performance, namely that Danish Re's decentralised structure enables business to be quoted and written by the local underwriter.

Danish Re's loss ratio at nine-months 2001, excluding WTC losses, improved by 3.9 percent to 70.5 percent, and operating expenses were below budget by seven percent. However the net $22 million losses from the WTC have added 22.4 percentage points to the nine-month loss ratio and transformed the initially anticipated modest operating profit into a loss.

A.M. Best expects a combined ratio below 100 percent by year-end 2002.