A.M. Best Co. has confirmed the Financial Strength Rating
(FSR) and Issuer Credit Rating (ICR) of Montpelier Reinsurance
Ltd. (Montpelier Re). Montpelier Re is a wholly owned subsidiary
Montpelier Re Holdings Limited
). The rating agency provided an FSR of "A" (Excellent) and ICR
of "a" to Montpelier Re. It also affirmed the ICR of "bbb" and
debt ratings of Montpelier Re Holdings. All the ratings carried a
AXIS CAP HLDGS (AXS): Free Stock Analysis
GLOBAL INDEMNTY (GBLI): Free Stock Analysis
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MONTPELIER RE (MRH): Free Stock Analysis
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The rating affirmation came on the back of a number of factors.
These include the company's solid risk-adjusted capitalization,
superb long-term operating performance, a well-diversified
business portfolio, strong competitive position, a management
team with much expertise and strong enterprise risk management
However, the rating agency pointed out that being a global
property catastrophe focused reinsurer, the company is vulnerable
to low frequency, high severity losses which partially offsets
the positives. Nevertheless, this aspect is taken care of by the
company's robust risk-adjusted capital levels.
The stable outlook assigned on the ratings of Montpelier Re was
on account of the company's financial flexibility, capital market
accessibility and favorable rate environment in its targeted line
A.M. Best stated that an upward revision in the ratings or
outlook can take place if the company continues to maintain
strong risk-adjusted capital levels and consistently delivers
strong operating profitability compared to its peers.
Rating affirmations from credit rating agencies play an important
part in retaining investor confidence in the stock as well as
maintaining the creditworthiness in the market. We believe that
the company's present score with the credit rating agencies will
help it write more business going forward.
Earlier in Sep 2012, Fitch Ratings upgraded the ratings on
Montpelier Re Holdings and its subsidiary, Montpelier Re. The
senior unsecured debt ratings of MRH was upgraded to "BBB+" from
"BBB" and the Insurer Financial Strength (IFS) rating of
Montpelier Re was upgraded to "A" from "A-".
Montpelier currently carries a Zacks Rank #1 (Strong Buy). Among
others in the industry,
AXIS Capital Holdings Limited
Global Indemnity plc
Homeowners Choice Inc.
) carry the same Zacks Rank and appear impressive.