A.M. Best Removes From Under Review and Affirms Ratings of Omega US Insurance, Inc.
A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Omega US Insurance, Inc. (Omega US) (headquartered in Schaumburg, IL). The outlook for both ratings is stable.
The ratings of Omega Insurance Holdings Limited (Omega) (Bermuda) and its subsidiaries including Omega Specialty Insurance Company Limited (OSIL) (Bermuda) and Omega US had been placed under review reflecting the uncertainty regarding Omega’s board composition, operational management and future strategy. Following the appointment of a new board and chief executive officer and a wide-ranging review of Omega’s operations by the new chairman and chief executive officer, A.M. Best’s concerns have been alleviated.
The ratings of Omega US reflect its strong capitalization driven by its low underwriting leverage, efforts to maintain underwriting discipline and the explicit support provided by Omega in the form of capital infusions, subsequent to the initial capitalization of Omega US in 2007, and quota share reinsurance provided by OSIL. The ratings therefore reflect the implied continued support to be provided to Omega US by Omega in the future to support Omega US’ expansion in the United States. Omega US has faced notable challenges inherent in the operation of any company during its early stages, including the overall execution risk of its business plan in the highly competitive U.S. surplus lines sector.
The principal methodology used in determining these ratings is http://www.ambest.com/ratings/methodology/bcrm.pdf, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; and “A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.