A group of startup reinsurers, formed in the wake of thereinsurance sector's record hurricane losses this year and dubbedthe "Class of 2005," may have difficulties achieving "A" ratingsbecause of several factors, according to Fitch Ratings.
The 10-12 reinsurers, formed in large part to capitalize onanticipated favorable market conditions, resemble companies formedin the wake of large sector-wide losses caused by 1992's HurricaneAndrew and Sept. 11, 2001, Fitch said.
While Fitch said its rating methodology does not impose aceiling on startup reinsurers' ratings, the agency noted a fewfactors would make it difficult for the majority of the Class of2005 to achieve insurer financial strength (IFS) ratings as high asthe "A" range but would not preclude "secure" ratings in the "BBB"range.
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