LONDON--(BUSINESS WIRE)--A.M. Best has removed from under review with developing implications and upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a+” from “a-” of EC Insurance Company Limited (ECIC) (United Kingdom). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings were placed under review with developing implications in September 2017 following the announcement that ECIC’s intermediate parent, EC Insurance Holdings Limited, has entered into an agreement for the sale of ECIC to Markel Capital Holdings Limited, the ultimate parent of which is Markel Corporation (Markel). The acquisition closed in November 2017.
The ratings have been removed from under review as A.M. Best has completed its assessment of Markel’s plans for ECIC and the impact on ECIC’s rating fundamentals.
The rating upgrades reflect the substantial reinsurance support ECIC receives from an affiliated company, Markel International Insurance Company Limited (MIICL), which is a member of Markel’s lead rating unit, Markel North America Insurance Group. Under the loss portfolio transfer reinsurance agreement between the two entities, 100% of the losses incurred by ECIC are reinsured by MIICL. The agreement also covers any new business written by ECIC.
ECIC also has entered into a renewal rights transfer agreement with MIICL and A.M. Best anticipates that ECIC may cease to write business and potentially enter run off during 2018.
The ratings of ECIC reflect Markel North America Insurance Group’s balance sheet strength, which A.M. Best categorises as strongest, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.
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