A.M. Best Places Ratings of Tower Group International, Ltd.'s Subsidiaries Under Review With Negative Implications
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of the pooled and reinsured members of the Tower US Pool (Tower). Concurrently, A.M. Best has placed under review with negative implications the ICR of "bbb-" as well as the debt rating of "bbb-" on $142.5 million 5.00% senior convertible notes, due 2014 of the intermediate holding company, Tower Group, Inc. A.M. Best also has placed under review with negative implications the FSR of A- (Excellent) and ICR of "a-" of CastlePoint Reinsurance Company, Ltd. (Bermuda). All companies are owned by Tower Group International, Ltd. [NASDAQ: TWGP] and headquartered in New York, NY, unless otherwise specified. (See below for detailed listing of the companies and ratings.)
The under review status reflects Tower's previously issued press release, which announced the postponement of its financial results for the second quarter of 2013. Additionally, on August 8, Tower's second quarter results, including an anticipated prior year loss reserve charge of approximately $60 million to $110 million pre-tax, were announced. These rating actions also take into consideration the impact on reserve leverage and the increased uncertainty as respects future reserve charges. However, even at the high end of the reserve charge, risk-adjusted capitalization is expected to remain supportive of the ratings.
The ratings will remain under review pending further discussions between A.M. Best and Tower's management. The negative implications reflect the reasonable likelihood that the ratings and/or outlook could be downgraded and/or revised, respectively.
The FSR of A- (Excellent) and ICRs of "a-" have been placed under review with negative implications for the following pooled and reinsured members of Tower US Pool:
CastlePoint Insurance Company
CastlePoint National Insurance Company
Tower Insurance Company of New York
Tower National Insurance Company
Preserver Insurance Company
North East Insurance Company
Hermitage Insurance Company
CastlePoint Florida Insurance Company
Kodiak Insurance Company
York Insurance Company of Maine
Massachusetts Homeland Insurance Company
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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
A.M. Best Co.
Kenneth Monahan, 908-439-2200, ext. 5342
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
KEYWORDS: United States Europe North America New Jersey
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