Alleghany's Underwriters Re Assigned Best Rating

Alleghany's Underwriters Re Assigned Best Rating

NU Online News Service, July 3, 3:50 p.m. EDT? Insurance rater A.M. Best has assigned an "A" (Excellent) financial strength rating to Underwriters Reinsurance Company, a business that was recently acquired by Alleghany Corporation to help support future businesses of Alleghany's newly purchased Royal Specialty Underwriting Inc.

Alleghany's previously announced $115 million deal to purchase Royal Specialty Underwriting--along with a managing underwriting agency, renewal rights to the ongoing business underwritten by Royal Specialty Underwriting, and the related unearned premium reserve portfolio--was completed this week.

Royal Specialty Underwriting, an Atlanta-based excess and surplus underwriting operation, had previously been part of U.K. insurer Royal & SunAlliance Insurance Group plc.

The Underwriters Reinsurance Company, which the New York-based Alleghany acquired from Swiss Reinsurance Co., is expected to support future businesses to be underwritten from Royal Specialty Underwriting.

The Oldwick, N.J.-based A.M. Best noted that Alleghany is also expected to buy Landmark American Insurance Co. as its surplus-lines carrier to write the non-admitted business of Royal Specialty Underwriting.

Commenting on its newly assigned "A" rating for Underwriters Reinsurance, which will soon be renamed RSUI Indemnity Co., A.M. Best noted that Alleghany has capitalized Underwriters Re at some $500 million.

The rating agency explained that its rating reflects Underwriters Re's "excellent capitalization," as well as historical underwriting profitability of Royal Specialty Underwriting's various books of business. Other positive factors include Alleghany's financial flexibility and its "historical track record of profitably" from operating well-capitalized insurance subsidiaries, A.M. Best said.