A.M. Best Assigns Ratings to Watford Insurance Company Europe Limited

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of “a-” to Watford Insurance Company Europe Limited (WICE) (Gibraltar). The outlook assigned to both ratings is stable. WICE is a wholly owned subsidiary of Watford Re Ltd.

The ratings are based on WICE’s strong risk-adjusted capitalization; experienced underwriting partner led by Arch Underwriters Ltd., a wholly owned subsidiary of Arch Capital Group Ltd.; leading investment acumen of Highbridge Principal Strategies, LLC (HPS); and WICE's particular component of Watford Re Ltd.’s broad-based business plan. Partially offsetting these positive rating factors are the inherent risks associated with a start-up company and the risks associated with a subsidiary with a limited geographic footprint. In addition, the competitive market conditions in the insurance and reinsurance sectors in Europe and the United Kingdom may challenge the execution of the business plan.

A.M. Best believes that the underwriting risk coupled with the alternative investment strategy creates an elevated risk profile that could expose WICE on the asset and liability sides of the balance sheet. However, the skilled underwriting of Arch Capital Group Ltd. coupled with the experienced investment acumen of HPS will help manage these risks.

Key rating factors that could result in positive rating actions would be Watford Re Ltd. and WICE meeting or exceeding its business plan over the long term, which includes consistently strong operating results while maintaining strong risk-adjusted capitalization. Negative rating actions could occur if Watford Re Ltd. or WICE's operating performance is volatile, if the companies experience large underwriting or investing losses or if risk-adjusted capitalization becomes strained.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151209006081/en/

A.M. Best Company
Steven M. Chirico, CPA
Assistant Vice President
(908) 439-2200, ext. 5087
[email protected]
or
Greg Reisner
Managing Senior Financial Analyst
(908) 439-2200, ext. 5224
[email protected]
or
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
[email protected]
or
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
[email protected]

Source: A.M. Best Company

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