A.M. Best Removes Ratings of Validus Holdings, Ltd. and Its Affiliates From Under Review

• Press Release
• Source: A.M. Best Company
• On 9:35 am EDT, Wednesday September 9, 2009

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength ratings of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Validus Reinsurance, Ltd. (Validus) (Bermuda) as well as IPCRe Limited (Bermuda) and IPCRe Europe Limited (Dublin, Ireland) (collectively known as IPCRe) . A.M. Best also has removed from under review with negative implications and affirmed the ICR of “bbb-” and the indicative ratings for securities available under the shelf registration of “bbb-” on senior debt, “bb+” on subordinated debt and “bb” on the preferred stock of Validus Holdings Ltd (Validus Holdings) (Bermuda) [NYSE:VR] The outlook assigned to the above ratings is stable.

Related Quotes

Symbol	Price	Change
VR	26.17	-0.33

{"s" : "vr","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Concurrently, A.M. Best has withdrawn the ICR of “bbb-” and the indicative ratings of “bb+” on preferred stock, “bbb” on senior unsecured debt and “bbb-” on subordinated debt for securities available under the former shelf registration of IPC Holdings Ltd. (IPCRe Holdings) as these ratings have been merged out of existence.

On September 4, 2009, Validus Holdings completed the acquisition of IPCRe Holdings in exchange for a .9727 common voting share of Validus Holdings for each IPCRe common share and cash consideration of $7.50 per share. This effectively put IPCRe into run off as all renewal business going forward will be written by Validus. Management has indicated its intention to move capital from IPCRe to Validus commensurate with the movement of risk as business renews. A.M. Best will closely monitor this process to ensure capital is kept at levels that support the current ratings.

The ratings contemplate the prospective benefits that will be realized through the acquisition due to the larger capital base and market profile. However, it will take time to truly gauge these prospective benefits’ impact on the Validus franchise.

Partially offsetting these strengths is Validus’ susceptibility to low frequency, high severity events as a property catastrophe focused reinsurer and the increased uncertainty over the short term due to the business that was previously underwritten by IPCRe. The stable outlook reflects the expectation that operating performance and risk-adjusted capitalization will continue to remain supportive of the current rating levels.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Company
Analysts
Mark Murray, 908-439-2200, ext. 5126
mark.murray@ambest.com
or
Robert DeRose, 908-439-2200, ext 5453
robert.derose@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com