Best keeps Ironshore under review
Bermuda-based Ironshore insurance and its affiliated companies are to remain under review with negative implications, ratings agency AM Best said yesterday.
The agency said that Ironshore’s financial strength rating of A (excellent) and issuer credit ratings of “a” were not immediately affected by news that Guo Guangchang, the chairman of new parent company Chinese-based Fosun, had been assisting Chinese authorities in an investigation.
The news came amid a Chinese crackdown on corruption, although details of the investigation involving Mr Guo have not been revealed.
The trading of Fosun’s shares and convertible bonds, as well as shares in companies controlled by Mr Guo, were suspended in Hong Kong and the mainland were temporarily suspended earlier this month.
But a Fosun spokesman said: “The directors of the company are of the view that this investigation has not posed any material adverse impact on the finances or operation of the group.
“The operations of the company remain normal.”
AM Best said: “The existing under review status on Ironshore reflects AM Best’s concern over the weak financial profile of Fosun, represented by its high financial leverage and constrained liquidity position.
“These recent events create an additional level of uncertainty as to Fosun’s continued ability to improve its financial position within a time frame originally contemplated.
“Best will monitor this situation and conduct further discussions with management to assess Ironshore’s governance structures and regulatory oversight, which together could insulate Ironshore’s capital from adverse financial conditions at Fosun.”
The ratings agency added: “AM Best will continue to monitor the developments at Fosun and the implications for Ironshore, as well as Fosun’s other rated insurance subsidiaries, however the current ratings of Ironshore are unchanged.”
Ironshore has two operations in the US and one each in Ireland and the Cayman Islands.
Fosun bought 20 per cent of Ironshore in February and the remaining 80 per cent last month in a deal worth a total of $1.84 billion.