reports business journalist David Fox Bermuda is among the top three non-US jurisdictions in terms of the number of insurance/reinsurance entities being rated by leading ratings agency, A.M.

Best Co.

Best regional manager for Bermuda & Caymans in the international division, James B. Wynn, told a Bermuda Insurance Institute patrons luncheon at The Club yesterday that the UK with 78 companies and Canada with about 71 were the other two non-US jurisdictions where Best ratings have become prevalent since Best placed more emphasis on rating firms outside the US.

By early next new year, some 70 Bermuda companies could be rated by Best.

Mr. Wynn said, "I am reviewing eight captives right now, and that's out of a total of about 15 that we will be looking at over the next 90 days. A lot of them, of course, are going to be captives. "The larger captive managers in Bermuda are interested.'' Best believes that many more Bermuda captives will seek a rating from the near century-old insurance rating facility.

Mr. Wynn said his firm has been aware of the key role Bermuda has played in the non-traditional insurance business.

He said, "The development of the property catastrophe market has become significant, especially because it really took off premium-wise in the last five to seven years. "But it was ten years ago, with the start up of excess liability insurers ACE and EXEL, that we first started to pay closer attention to Bermuda. Remember, before that Bermuda was seen as mostly an alternative risk transfer venue.

"Fred Reiss came here many years ago and set up offshore captives. And until the tax laws changes in the US, although I don't see it as a prime motivater anymore, Bermuda's growth will continue. Certainly the growth of captives has slowed, but it certainly has been more than made up for on the company side.'' Mr. Wynn was joined by Best assistant vice president, John Andre, part of a group of analysts and others who were on the Island this week for the two day A.M. Best/College of Insurance Financial Analysis Seminar at the Bermuda Insurance Institute, which ended on Tuesday.

The seminar provided direct insight into how analysts evaluate relevant financial ratios and operational results out of an insurance company's statutory annual statement. Mr. Andre said that objectives of Best insurance ratings was to present an independent opinion on the overall financial condition and operating performance of a company and determine its relative ability to meet obligations to policyholders. Best also seeks to integrate quantitative and qualitative factors affecting overall performance as part of a comprehensive evaluation.

Quantitatively, Best look at financial trends, comparisons to industry and peer group performance, profitability, leverage /capitalisation and liquidity.

A qualitative evaluation requires an assessment of the company's market, operating strategy, regulatory climate and management.

BEST RATINGS -- Assistant vice president John Andre (left) and Regional manager, Bermuda & Caymans, international division, James B. Wynn of insurance ratings agency, A.M. Best Company.

BUSINESS BUC