Abstract: In this paper we will discuss about A.M. Best Co.'s credit rating, financial strength rating and issuer credit ratings, for Validus Reinsurance Ltd.
In 2007, Validus was awarded the financial strength rating A- and issuer credit ratings “a-”.
These ratings had been assigned a “stable outlook”. Validus' merger with Talbot Holdings had a strong impact on these ratings.
Validus Reinsurance Ltd. had been rated as A- for financial strength and “a-” for issuer credit by A.M Best, a credit rating agency situated in US, for the financial year 2007.
Simultaneously, Validus Holdings, Ltd. had been awarded the "bbb-” issuer credit rating.
These ratings were assigned a “stable outlook” and removed from the “under review” status.
A.M. Best Co. was established in 1899. It is an independent organization of credit rating that serves the insurance companies, health care system providers, hospitals and banks.
In the same year, Validus Reinsurance owned Talbot Holdings. Therefore, A.M Best carefully examined the possible impact of this merger and Validus’ capital raising activities while setting these ratings.
However, Validus collected more than 545 million dollars from its initial public offering issued in 2007.
These ratings showed that Validus' was growing smoothly and the company's risk management framework was sound. These ratings would help Validus to improve its market profile. In spite of all these goods, the company's management would be tested in the distant future.