A.M. Best has placed the financial strength rating of “A- (Excellent)” and issuer credit rating of “a-” of Bermuda-based S.A.C. Re under review with negative implications.
The ratings actions reflect A.M. Best’s concern with the business plan originally presented by S.A.C. Re, which took into account-invested assets being managed by S.A.C. Capital.
Presently, there is uncertainty as to whether the invested assets can be managed by S.A.C. Capital as well as whether there will be ramifications concerning any affiliation with S.A.C. Capital on the reinsurance franchise in the future.
In a recent statement A.M. Best said: “[We] expect to resolve the under review status upon review of an updated business plan that may or may not include S.A.C. Capital as an investment manager.”
“Retention of key management through the forecasted business plan will also be an important factor in resolving the under review status.”
Rating downgrades could occur if S.A.C. Re cannot separate itself from reputational risk, the business plan is not executed over the long term or key management is not retained.
