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AM Best places Catlin rating under negative review

Bermuda-based insurer Catlin Insurance Company Ltd had its A financial strength  rating placed under review with negative implications by rating agency AM Best today (19 October).

AM Best said: “The ratings have been placed under review due to AM Best’s concerns relating to the level of Catlin’s consolidated catastrophe exposure and the likely future impact of major events on risk-adjusted capitalisation. As part of the financial strength rating evaluation process, AM Best intends to assess the benefit, if any, to Catlin Insurance of its proposed catastrophe swap agreement.”

As revealed last month by Insider Week Catlin is entering into a catastrophe swap agreement that will provide it with coverage of up to $200.25mn for global natural catastrophes.

At the time Stephen Catlin, chief executive of Catlin, said: “This transaction, when completed, will strengthen Catlin’s ability to withstand claims arising from a series of severe natural catastrophes.

“Along with the steps Catlin has already taken to limit its exposure to natural catastrophe risk, the catastrophe swap will increase the security that Catlin provides to both policyholders and investors.”

In addition to the Bermudian company, AM Best has also placed its A rating of the UK insurer, Catlin Insurance Company (UK) Ltd, under review with negative implications.

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