AM Best reviews ratings

US

Rating agency AM Best said it will be reviewing primary insurers’ ratings in light of the recent legislative changes in Florida affecting the Florida Hurricane Catastrophe Fund. “Companies most exposed to negative rating pressure and rating downgrades will be those with large gross catastrophe exposure, and thus greater exposure to FHCF recoverables,” AM Best said. The rating agency added that it believes the legislative changes have weakened the business profile of companies with significant concentration of Florida business. However, reinsurers’ ratings are not expected to be directly affected by the reform but AM Best did say that it expects the number of sidecar operations and start-ups formed in 2005 and 2006 to “significantly decline due to the unexpected increase in reinsurance capacity”.