December 13, 2005 by Canadian Underwriter
Montpelier Re Holdings Ltd. (NYSE:MRH) recently implemented actions deemed necessary to receive an affirmative rating from A.M. Best Company.
In concurrence with these actions, Montpelier has declared a quarterly dividend of $0.075 per Common Share, which is payable on January 13, 2006 to shareholders of record on December 31, 2005.
“Reducing our ordinary dividend will allow us to deploy additional capital in our core lines of business which we expect, due to price increases as a result of Hurricanes Katrina, Rita and Wilma, will deliver very satisfactory returns in 2006,” Anthony Taylor, chairman, president and chief executive says.
A.M. Best Co. recently affirmed the financial strength rating of A- (Excellent) and issuer credit rating (ICR) of “a-” to Montpelier Reinsurance Ltd..
The ratings company additionally affirmed the ICR of “bbb-” and all existing debt ratings of Montpelier Re Holdings Ltd.
These affirmations followed a review of Montpelier’s capitalization action plan related to losses incurred from hurricanes Katrina, Rita and Wilma. The Company’s action plan, which has stabilized its current ratings, includes both a reduction in the company’s risk profile and additional capital issues over the near term. Other action’s Montpelier will implement include a prudent underwriting strategy to better manage the potential accumulation of losses from a single large catastrophic event.
A.M. Best assigned the Company’s ratings a negative outlook until the new strategies and risk mitigation procedures are fully tested.