One of Bermuda's newest reinsurance companies has been ranked as having excellent financial strength by one of the world's top investment ratings services.

Max Re was set up only a few months ago as the brain child of former XL Insurance guru Bob Cooney, and the business has already raised hundreds of millions of dollars.

Now Max Re is set to take reinsurance business from around the world and has been given a credibility boost when A.M. Best Co., the world's oldest insurance and information ratings service, yesterday assigned Max Re a financial strength rating of A minus or excellent.

The rating assignment follows the completion of an initial private offering by the insurer's parent organisation, Maximus Capital Holdings, Ltd., Bermuda, which raised $331 million.

David Brining, executive vice president of Max Re, said: "We are very happy at A.M. Best's ranking.

"It comes as no surprise, however, after completing the initial private offering.'' Max Re has been working on getting funding to start the business since Bob Cooney left XL Insurance last July to set up the new company.

In October he was joined by Mr. Brining and together they have been making the financial future for the company secure.

And now that they have official recognition from A.M. Best, they will start looking for proper office suites in Hamilton for the company's six employees.

The company started its life in temporary offices in condominiums in Salt Kettle, but now the future is secure, they will be moving to larger and more permanent premises.

The company has big plans. "We expect to raise between $200 and $300 million by March this year,'' said Mr. Brining, who left Scandinavian Re to join the new venture. "There has been significant investor interest in the company.'' Such is the confidence in the new company that A.M. Best said in a statement issued yesterday that its rating was based on the achievement of the existing business plan and a successful completion of the additional offerings.

As a newly formed Bermuda-based reinsurer, Max Re's operating activities will focus on traditional, finite and specialty risk reinsurance of long-tailed liabilities that carry relatively predictable payout patterns--such as annuities, structured settlements, life insurance, disability income, workers' compensation and medical malpractice insurance.

The statement from A.M. Best said: "The rating reflects A.M. Best's expectation that the organisation's executive management, experienced in the reinsurance arena and in similar start-up activities, will enable the company to succeed in executing its business plan.

Max Re gets ratings boost "The rating also acknowledges the adequate capitalisation that will exist during the company's start-up period relative to its expected business needs.

"This financial flexibility, combined with the existence of a $250 million letter of credit facility provided by Bank of America, provides adequate support for policyholder liabilities given the nature of the organisation's insurance risks and planned investment activities.

But A.M. Best noted the uncertainty associated with the start-up operation, including the potential for volatility inherent in the company's anticipated investment strategy.

But added that it was comfortable with Max Re's capacity to withstand potential volatility in investment returns without compromising policyholder security.

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