Alterra Capital Holdings Ltd, the reinsurer created in the 2010 merger of Max Capital Group and Harbor Point Ltd, had its credit rating raised by Standard & Poor’s, citing the strength of the combination.The financial strength and counterparty credit ratings on the core companies of Bermuda-based Alterra rose to A from A-, S&P announced yesterday.“The rating action reflects Standard & Poor’s view that Alterra has benefited from a larger and enhanced operating platform and improved diversification by platform, product, and account type,” S&P said in its ratings statement.S&P noted that given its more diverse earnings streams, Alterra delivered a combined ratio of about 103.5 percent for the first nine months of 2011 including all corporate expenses, despite significant catastrophe losses the global industry incurred during that time.“We believe that enterprise risk management (ERM) at Alterra is strong,” S&P added. “We believe that the merger of Max Capital and Harbor Point is successfully completed and that the risk culture at Alterra is a key factor in the speed and diligence of the integration process.“Underwriting, pricing, reserving, risk management, investments, human resources, and financial reporting functions are fully integrated at Alterra, and integration risk is minimal at this point.“Other factors supporting the ratings include Alterra’s very strong capital adequacy, strong investments and liquidity, and management’s significant depth and breadth. Partially offsetting these strengths are the potential pricing and reserving risks related to the group’s significant long-tail casualty writings, potential earnings volatility as a result of losses stemming from weather-related and man-made catastrophes, and the lower proportion of premiums sourced outside the US compared with other Bermuda-based insurers and reinsurers.”