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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 29, 2008 12:00 AM (EDT)
A.M. Best Co. has assigned a financial strength rating (FSR) of A (Excellent) and an issuer credit rating (ICR) of "a" to Starr Indemnity & Liability Company (SILC) (Dallas, TX), an indirect wholly-owned subsidiary of Starr International Company, Inc. (SICO) (Panama), a private investment holding company. The outlook for both ratings is stable.
SILC currently participates in quota-share reinsurance programs managed by a group of specialized insurance agency subsidiaries of Starr Underwriting Agencies, LLC (SUA), a subsidiary of C.V. Starr & Co., Inc. These programs focus on specialty commercial lines, and the company expects to participate on several other programs later in 2008. The company also plans to distribute certain products directly. The initial ratings reflect SILC's sound business plan, solid risk-adjusted capitalization and its existing relationships with the various parties who will also be involved in the programs in which SILC intends to participate and the quality of those other participants. SILC benefits from the management, underwriting, claims handling and loss control expertise provided by the SUA agencies. While it is expected that the diversification of SILC's business across several commercial lines will minimize the impact of any specific event on the company, SILC has purchased third-party reinsurance to limit its net exposures on a per risk basis and to catastrophic events.
The above strengths are somewhat offset by the execution risk associated with expanding SILC's operations, the potential impact of continued soft market conditions on the business in which the company plans to participate and the uncertainties surrounding outstanding legal issues involving SICO and certain members of its leadership team. While it has established relationships with several key participants in its target markets, SILC's ability to build and maintain market share will have to be proven over time. Accordingly, A.M. Best will closely monitor SILC's performance against its stated business plan. Any negative deviations in terms of management, earnings, capitalization or risk profile could result in downward pressure on the assigned ratings.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.