OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co.has affirmed the financial strength rating of A
(Excellent) and issuer credit rating of “a” of Eastern Re Ltd. SPC
(Eastern Re) (Grand Cayman, Cayman Islands). The outlook for both
ratings is stable.
The ratings recognize Eastern Re’s strategic affiliation with its
holding company, Eastern Insurance Holdings, Inc. (EIHI) [NASDAQ:
EIHI] and the member companies that make up the Eastern Alliance
Insurance Group (EAIG), 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
and EAIG 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 and utilizes the
expertise ofEmployers 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.
Factors that could influence the ratings of Eastern Re include a change
in the overall risk profile of the Easterm Alliance Insurance Group
(both more and less risky) as well as a change in the consolidated
capital strength of the segregated cells.
A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated 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 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”; “Assessing Country Risk”; and
“Alternative Risk Transfer (ART).” 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.
Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS
RESERVED.
A.M. Best Co.
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
Source: A.M. Best Co.