One of Bermuda's newest reinsurers, Da Vinci Reinsurance Ltd., has been given top ratings by two of the most reputable US ratings agencies on the day that the company officially set up shop.

The reinsurer, which was set up in the wake of the September 11 attacks by Renaissance Re to take advantage of new market conditions, was assigned an A (Excellent) financial strength rating by AMBest.

Standard & Poor's also gave the company the thumbs up with an "A" rating for its financial strength.

Da Vinci Re is a strategic joint venture formed by Renaissance Reinsurance Ltd. and State Farm Mutual Insurance Company to write various property/catastrophe cover on a worldwide basis.

And yesterday Renaissance Re announced the funding of the new venture with initial surplus of $500 million.

AM Best said the rating reflects the company's strong capitalisation with investments by State Farm and Renaissance Re, strengthened by bridge funding to provide an initial capital base of $500 million.

James Stanard, chairman and president of Renaissance Re, said: "We are pleased to have Da Vinci Re be the first new reinsurer providing highly rated capacity to the market in the wake of the World Trade Center tragedy. By leveraging the existing underwriting expertise and operational capabilities of Renaissance, we were able to rapidly bring to the market a full operational company which has the ability to underwrite business effective immediately."

AM Best said that in its opinion Da Vinci Re also benefits from Renaissance Re's sponsorship and management, which provides it access to a proven business model as demonstrated by the superior results achieved by Renaissance Re and its prior joint venture relationships.

AM Best expects the company to maintain a conservative financial leverage position with future debt to capital not to exceed 25 percent, it said in a release.

Da Vinci Re was one of the first companies formed to provide fresh capacity to the property catastrophe reinsurance market in the wake of the September 11 terrorist attacks. So far there have been six companies to set up shop in Bermuda.

Da Vinci Re will provide companion line capacity for business underwritten by Renaissance Re, a recognised leader in the property catastrophe reinsurance market.

AM Best said that under Renaissance Re's management, Da Vinci Re will be subject to the same highly disciplined underwriting approach and will be supported by its proprietary REMS catastrophe modelling system, adding that Da Vinci Re's risk exposure profile will therefore be comparable to that of Renaissance Re.

But AM Best said that Da Vinci Re's strengths were partially offset by the potential for increased market competition in property/catastrophe coverage from other new companies as additional capacity is currently entering the market to take advantage of short-term price hardening. For more information see www.ambest.com.