CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - DECEMBER 18, 2007 12:00 AM (EST)
A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from A- (Excellent) and issuer credit rating (ICR) to "aa" from "a-" of Seaworthy Insurance Company (Seaworthy) (Annapolis, MD). The ratings have been removed from under review with positive implications and assigned a stable outlook.
These rating actions reflect both the implicit and explicit financial support provided by Seaworthy's ultimate parent, Berkshire Hathaway Inc. (Berkshire Hathaway) (Omaha, NE), its insurance affiliate and the future benefits to be derived from two significant reinsurance transactions effective December 31, 2007. The ratings also consider Seaworthy's consistently profitable operating results and management's niche ocean marine underwriting expertise. In a transaction that closed in third quarter 2007, Seaworthy's parent company, Boat America Corporation (Boat America) (Alexandria, VA), was purchased by National Indemnity Company (National Indemnity) (Omaha, NE), an indirect wholly-owned subsidiary of Berkshire Hathaway.
The reinsurance transactions include a loss portfolio transfer and quota share agreement between Seaworthy and National Indemnity. The transactions demonstrate in effect the commitment provided by Berkshire Hathaway, partially mitigating the future risk of adverse loss reserve development and significantly improving Seaworthy's risk-adjusted capitalization, which is supportive of its Superior rating.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.