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A.M. Best assigns Torus' U.S. operations a negative outlook

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A.M. Best Co. Inc. has assigned Torus Insurance Holdings Ltd.'s Wilmington, Del.-based Torus Specialty Insurance Co. and Torus National Insurance Co. units a negative outlook while affirming their financial strength rating of A-, Best said Friday.

All ratings have been removed from being under review with negative implications, the Oldwick, N.J.-based rating agency said in a statement.

The rating actions follow completion of the acquisition of London-based Torus by Enstar Group Ltd. and Stone Point Capital L.L.C. on April 1, and Best's review of the new owners' plans for the Torus group.

Best said the positive rating factors supporting the affirmations include the support of Enstar and Stone Point, which are expected to provide strategic and operational support to Torus, as well as financial assistance if needed. Both have a proven track record of building strong and profitable insurance businesses, Enstar in insurance runoff and Stone Point in active underwriting, Best said in the statement.

Best said that based on the group ratings, any future rating actions for Torus Specialty and Torus National will likely be in accordance with any future rating actions on Torus group.

“Torus' consolidated historical financial performance, as well as those of Torus Specialty and Torus National, has been weak with overall losses made each year since 2010,” said Best in the rating announcement. “Management, supported by the group's new owners, is committed to improving financial performance and has taken actions to achieve significant expense savings as well as exiting underperforming lines of business. However, despite these actions, A.M. Best believes that achieving sustainable profitable results will remain a challenge, given the strong competition in Torus' main business lines.”

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Positive rating actions could follow if management delivers on its plan to improve financial performance for the Torus group of companies, Best said. Likewise, negative rating actions could follow if Torus continues to underperform against its own plans and A.M. Best's expectations, said Best.

“We are very pleased that A.M. Best's review has concluded with an affirmation of our A.M. Best ratings,” said Torus CEO Dermot O'Donohoe in a statement.

“This reflects our strengthened capital position following a loss portfolio transfer reinsurance agreement with a subsidiary of Enstar, which covers Torus group's discontinued lines of business; as well as actions taken to discontinue the underperforming lines and achieve significant expense savings,” he said, adding that “we are confident that Torus, with the support of our new owners, Enstar and Stone Point, is now on a solid path to future success and profitability.”

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