OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has upgraded the financial strength rating to A
(Excellent) from A- (Excellent) and issuer credit rating to “a” from
“a-“ of Eastern Re Ltd. S.P.C. (Eastern Re) (Grand Cayman, Cayman
Islands). The outlook for both ratings remains stable.
The ratings recognize Eastern Re’s strategic affiliation with the
holding company, Eastern Insurance Holdings, Inc. (EIHI) [NASDAQ:
EIHI], its historically profitable operating results and sound
stand-alone capitalization. These positive rating factors are partially
offset by Eastern Re’s exclusive reliance on EIHI for production of all
of its business, as well as the mono-line orientation of Eastern Re,
which primarily acts as a workers’ compensation reinsurer.
Eastern Re is a segregated portfolio company, or cell captive, whose
general cell is a wholly owned subsidiary of EIHI, which also indirectly
owns the Eastern Alliance Insurance Group (EAIG). EAIG consists of Eastern
Alliance Insurance Company, Allied Eastern Indemnity Company
and Eastern Advantage Assurance Company, all
Pennsylvania-domiciled workers’ compensation insurance companies, and
Employers Security Insurance Company, an Indiana-domiciled workers’
compensation insurance company, all of which produce business through
regional agents. These insurance companies, which are the non-life
risk-bearing entities of EIHI, provide both fronting capabilities and
reinsurance protection to Eastern Re. Eastern Re also utilizes the
expertise of Employers Alliance Inc., a Pennsylvania-domiciled insurance
services provider and member of EAIG that acts as the third party
administrator and provides services for all of the cells of Eastern Re.
Eastern Re issues preferred shares to its cell owners, which are agent
or group captives that purchase workers’ compensation coverage from
EIHI. These agent and group captives participate in the profits and
losses of the cell for which they are the owners. This dynamic provides
added incentive to the agent or group captive to prevent adverse
selection for the business being assumed by Eastern Re.
A.M. Best remains the leading rating agency of captive insurers rating a
wide variety of more than 200 captives in the United States and
throughout the world.
For current Best’s Credit Ratings and independent data on the captive
and alternative insurance market, please visit www.ambest.com/captive.
The principal methodology used in determining these ratings is Best’s
Credit Rating Methodology -- Global Life and Non-Life Insurance Edition,
which provides a comprehensive explanation of A.M. Best’s rating process
and highlights the different rating criteria employed. Additional key
criteria utilized include: “Risk Management and the Rating Process for
Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; “Rating
Members of Insurance Groups”; and “A.M.
Best’s Ratings & the Treatment of Debt.” Methodologies 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.
Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS
RESERVED.
Source: A.M. Best Company
Contact:
A.M. Best Company
Thomas Herriger, 908-439-2200, ext. 5375
Senior
Financial Analyst
thomas.herriger@ambest.com
or
Steven
Chirico, CPA, 908-439-2200, ext. 5087
Assistant Vice
President
steven.chirico@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public
Relations
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com