CONTACTS:
FOR IMMEDIATE RELEASE
LONDON - FEBRUARY 26, 2016 11:44 AM (EST)
A.M. Best has revised the issuer credit rating (ICR) outlook to negative from stable and affirmed the financial strength rating (FSR) of A (Excellent) and the ICR of “a+” of W. R. Berkley Insurance (Europe), Limited (WRBIEL) (United Kingdom). The outlook for the FSR remains stable.
The ratings reflect WRBIEL’s support from its ultimate parent, W. R. Berkley Corporation (WRBC), demonstrated by capital injections during 2014 and 2015 and an unlimited and unconditional guarantee from Berkley Insurance Company (BIC), a subsidiary of WRBC. In addition, BIC fully reinsures the company’s Berkley Re UK and Berkley Offshore Underwriting Managers’ coverholder business via a quota share programme.
The negative outlook on the ICR reflects WRBIEL’s diminishing business profile and reduced importance to WRBC as a means of accessing the UK and European insurance markets. In particular, the transfer of business from WRBIEL to other entities within the group, which is due to take place during 2016, will lead to a significant reduction in the volume of business to be written.
WRBIEL maintains solid risk-adjusted capitalisation, with recent post-tax losses offset by capital injections from WRBC. A.M. Best expects further financial support from the group to be forthcoming should risk-adjusted capitalisation fall below a defined tolerance.
The company reported a technical loss of GBP 40.2 million in 2014 (2013: GBP -4.7 million), driven by a combination of adverse prior year reserve development on U.K. professional indemnity and Spanish medical malpractice business, and large claims on marine hull and construction and engineering business. Although technical performance improved during the first nine months of 2015, a pre-tax loss is likely to be reported for the full year.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.