AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries
AM Best has maintained a negative implications status for the Financial Strength Rating of A- (Excellent) for Watford Re Ltd. and its subsidiaries, as well as for its Long-Term Issuer Credit Ratings. This follows the completion of a merger with Arch Capital Group, which could de-risk Watford's investment portfolio and enhance ratings. However, the long-term impacts remain uncertain until further evaluations and discussions with management are conducted. AM Best will continue analyzing Watford's financial projections and operating structure to assess future ratings.
- Potential de-risking of investment portfolio due to merger with Arch Capital.
- Possibility of rating enhancement as part of a larger, well-diversified group.
- Under review status with negative implications for ratings, indicating uncertainty.
- Dependence on further evaluations and discussions to determine future impacts on ratings.
AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of Watford Re Ltd. (Watford Re) (Bermuda) and its subsidiaries, Watford Insurance Company Europe Limited (WICE) (Gibraltar), Watford Insurance Company (WIC) (New Jersey) and Watford Specialty Insurance Company (WSIC) (New Jersey). In addition, AM Best has maintained the under review with negative implications status for the Long-Term ICR of “bbb-” (Good) and the Long-Term Issue Credit Rating of “bb” (Fair) on the
This Credit Rating (rating) action considers the recent announcement that Arch Capital Group Ltd. (Arch) has completed its merger agreement with Watford. Arch has assigned its interests and obligations under the merger agreement to a newly formed entity, Greysbridge Holdings Ltd., under which Arch owns approximately a
AM Best acknowledges that the transaction with Arch could benefit the Watford group through potential further de-risking of its investment portfolio, removing the burden of public company status, and possible rating enhancement stemming from being a member of a large, well-diversified group. However, although the transaction has closed, the ultimate impact to Watford's ratings will be determined when AM Best has met with management and analyzed the group's business plans, including an analysis of future investment risk, financial projections and operating structure within the Arch group. The under review status therefore is expected to be resolved following these discussions. AM Best will continue to evaluate Watford’s balance sheet strength, operating performance and enterprise risk management to assess that it stays in line with projected amounts.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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FAQ
What is the current rating status of Watford Re Ltd. as of October 2023?
How could the merger with Arch Capital affect Watford Holdings Ltd. (WTRE)?
What does the negative implications status indicate for Watford's ratings?
What are the key factors influencing Watford's credit ratings after the merger?
