A.M. Best Company has removed XL Capital and PXRE Group Ltd. from review. The Oldwick, N.J.-based insurance rating service said it took the action based on the insurers' capitalization plans in response to the losses the companies suffered this year.
Best affirmed the financial strength rating of "A-plus" (Superior) of Hamiltion, Bermuda-based insurer XL. The company has been assigned a stable outlook.
The rating action reflects XL's recently raised capital of $3.2 billion, including $2.4 billion in common equity, in early December and steps taken by the group to reduce its exposure to catastrophe losses.
The capital was necessary following $1.8 billion in losses in the third and fourth quarters of 2005 from hurricanes and the unfavorable resolution in its dispute with Winterthur Swiss Insurance Company relating to its acquisition of Winterthur International in 2001, which will result in a fourth-quarter net charge of $830 million.
The financial strength rating of "A-minus" (Excellent) of Bermuda-based PXRE subsidiaries was affirmed. The action to remove PXRE from review was taken after Best reviewed the insurer's capitalization action plan for losses incurred from Hurricanes Katrina, Rita and Wilma. The plan included both a reduction in the company's risk profile and raising additional capital. Best said the combination of these actions has stabilized the carrier's current rating.
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