A.M. Best Co. avowed the Issuer Credit Rating (:ICR) of "bbb" of Global Indemnity plc (GBLI). Concurrently, the rating agency reiterated the financial strength rating (:FSR) of A (Excellent) and ICR of "a" of Wind River Reinsurance Company, Ltd. and its U.S. subsidiaries. Wind River is the subsidiary of Global Indemnity.
Additionally, A.M. Best reiterated the indicative ratings of "bbb" on senior unsecured debt, "bbb-" on subordinated unsecured debt and "bb+" on preferred stock of Global Indemnity.
All the ratings carry a stable outlook.
The rating affirmations came on the back of continued improved operational performances, diverse array of specialty product offerings in the United States and reinsurance in Bermuda and sturdy capitalization
However, a weak performance from specialty insurance operations in the United States and continued low interest rate environment dwarf the positives.
Nevertheless, solid performances from Wind River Re outperforming industry, sustained sturdy risk-adjusted capitalization, stabilized reserves coupled with the ability to achieve targets might drive rating upgrades.
Nonetheless, the ratings will be subject to downgrade if risk-adjusted capitalization erodes, operating results deteriorates or reserves fall.
Rating affirmations or upgrades from credit rating agencies play an important part in retaining investor confidence on the stock as well as maintaining credit worthiness in the market. Rating downgrades, therefore, adversely affect the business, apart from increasing the costs of future debt issuances. We believe that strong ratings will help Global Indemnity retain investor confidence and help it write more businesses going forward, thereby boosting results.
Global Indemnity carries a Zacks Rank #3 (Hold). Property and casualty insurers HCI Group, Inc. (HCI), Montpelier Re Holdings Ltd. (MRH) and Platinum Underwriters Holdings Ltd. (PTP) among others, carry a Zacks Rank #1(Strong Buy) and appear impressive.
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