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AM Best affirms Validus A rating

Ratings firm AM Best has affirmed the financial strength rating of A (Excellent) and issuer credit rating (ICR) of “a” of Bermuda-based Validus Re.

Additionally, AM Best has affirmed the ICR of “bbb” and debt ratings of the Bermuda-based parent company, Validus Holdings.

“The ratings reflect Validus Re’s solid risk-adjusted capitalisation, favourable operating performance since inception, experienced management team, excellent enterprise risk management programme and prudent operating strategies,” said AM Best in a statement. “Validus Re’s ratings are further supported by Validus Holdings, which provides financial flexibility as a publicly traded company on the New York Stock Exchange.”

Partially offsetting these strengths, stated the ratings firm, is Validus Re’s susceptibility to low frequency, high severity events as a property catastrophe-focused reinsurer. However, the company’s risk-adjusted capital remains at levels that have been stress tested to absorb significant catastrophe losses mitigating this concern. The stable outlook is reflective of AM Best’s expectation that the group will continue to produce favourable long-term operating results and maintain excellent risk-adjusted capitalisation, which is supportive of its current rating level.

“Since its formation in the fourth quarter of 2005, Validus Holdings has grown through organic growth and acquisitions,” said AM Best. “In July 2007, Validus Holdings acquired Talbot Holdings Ltd, which enhanced the business profile of the group by diversifying revenues to include other lines of business, spreading risk exposures geographically and expanding its distribution channels. This acquisition has served to complement the organic growth of revenues while also diversifying Validus Holdings’ exposures and enhancing its business profile. In November 2012, Validus Holdings continued its expansion through the acquisition of Flagstone Re, which will further enhance its client base and scale.”

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Published February 08, 2013 at 8:00 am (Updated February 07, 2013 at 8:36 pm)

AM Best affirms Validus A rating

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