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A.M. Best Co. has commented that the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a” of Validus Reinsurance, Ltd. (Validus Re) (Bermuda) remain unchanged following the recent announcement that its parent company, Validus Holdings, Ltd. (Validus Holdings) (Bermuda) [NYSE: VR], and Flagstone Reinsurance Holdings S.A. (Flagstone Re) (Luxembourg) have entered into a definitive merger agreement in which Validus Holdings will acquire all of the issued and outstanding shares of Flagstone Re, representing an aggregate equity value of $623 million. The ICR of “bbb” and debt ratings of Validus Holdings also remain unchanged. The outlook for all ratings is stable.
Validus Re maintains a strong financial position and a historically favorable operating performance, and has a proven track record of successful integration of acquisitions. The transaction also affords Validus Re with additional capacity and scale to take advantage of future opportunities as they arise.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Catastrophe Analysis in A.M. Best Ratings”; “Evaluating Country Risk”; and “Rating Members of Insurance Groups.”
Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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