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Montpelier Re Holdings Ltd. Message Board

  • mullagtawny mullagtawny Nov 8, 2005 3:20 PM Flag

    Impact due to Fitch downgrade?

    Apologize in advance if I am missing something...I am new to this stock.

    I noticed the drop in stock price after the earnings announcement. Interestingly there was no further drop after the Fitch downgrade on 11/4. Any idea why not?

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    • IMO, Fitch doesn't have much impact in the (re)insurance sector. By far the most important rating agency in this sector is A.M. Best followed by S&P, which is a distant second. Moody's is a distant third, and Fitch hardly makes the radar screen, in my view. One certainly observed the impact on MRH's stock price when the company's A.M. Best rating was cut. If the company's Best rating is reduced again to anywhere in the "B" level, I believe the underwriter will have a challenging time maintaining its business model.

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