A.M. Best Co. said it placed various ratings of Ironshore Inc., including the “A-minus” financial strength rating of its operating subsidiaries, on review with negative implications today.
The under-review status reflects Ironshore's material deviation from its original business plan and the risks in implementing key components of its new plan given current market conditions, the Oldwick, N.J. rating agency said.
In addition to the financial strength rating, the under-review status also applies to the issuer credit rating of “triple-b-minus” of Ironshore Inc. and the “a-minus” issuer credit rating of the operating companies.
The operating subsidiaries include Ironshore Insurance Ltd., Ironshore Reinsurance Ltd (both of Bermuda), Ironshore Indemnity Inc. (Minneapolis) and Ironshore Specialty Insurance Company (Phoenix).
Ironshore, which started its life as a Bermuda-based commercial property insurer in late 2007, has since formed IronPro to enter the management liability arena; IronBuilt to serve the construction market; IronHealth, specializing in health care liability; and IronSelect, an excess casualty division.
The company also entered the Lloyd's market, buying Pembroke Managing Agency and Syndicate 4000 in a deal that closed in early September last year.
In addition, in mid-December, Ironshore acquired the assets of Marine Re, a reinsurance specialist in hull and cargo for commercial and pleasure craft.
More recently, in late January, Ironshore announced that it would team up with C.V. Starr & Co. to launch Iron-Starr Excess Agency Ltd., a specialty lines insurance and reinsurance managing general agency, offering up to $75 million of catastrophic excess casualty capacity for Fortune 2000 companies and other excess financial and commercial lines insurance and reinsurance products.
The news followed Ironshore's announcement late last year that it snagged two leaders of senior management from American International Group–Kevin Kelley, the former chief executive of AIG's specialty insurer, Lexington Insurance, and Shaun Kelly, who had been Lexington's president and chief operation officer.
Kevin Kelley became Ironshore's new CEO, replacing founding CEO Robert Deutsch, who is now president. Shaun Kelly took on the role of CEO of Ironshore's U.S. Operations.
A.M. Best said it believes the change in business plan will ultimately enhance the Ironshore franchise, but that executing key components of the plan will be challenging over the short term due to market conditions.
The negative implications imply that the current ratings could be affirmed, or that should the revised business and capital plans not be executed as expected, downward pressure on the current ratings could result.
On a positive note, Best said that “given the prior experience of the new management team in executing similar strategies, A.M. Best expects the ratings will be affirmed once the key components of the new business plan have been completed.”
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.