LLOYD’S underwriter Amlin has seen its A- credit rating placed on review by analysts at AM Best, following its £350m ($573m) takeover of Fortis Corporate Insurance. AM Best, which specialises in rating insurance providers, placed Amlin’s issuer credit rating under review with negative implications after it unveiled the purchase of the continental European insurer from the Dutch government. The rating agency added that the under review status also applies to a range of Amlin’s bbb+ debt ratings. These are the London insurers’ £230m 6.5% subordinated debt, its $50m 7.3% subordinated debt and its $50m 7.1% subordinated debt. Amlin’s Berumda operation has also found its A, excellent financial strength rating and issuer credit rating, under review, together with its Lloyd’s syndicate 2001. AM Best said it needs to evaluate the impact of the purchase on the group’s consolidated risk-adjusted capitalisation, as well as the financial strength of Fortis Corporate Insurance. “The purchase is likely to be financed through a placing of Amlin shares and from existing group cash resources,” it added. However, it added that the acquisition will improve Amlin’s business profile in continental Europe and the geographic diversification of the group’s underwriting portfolio. Meanwhile, Fitch maintained Fortis Corporate Insurance on its rating watch, but retained its A- status.
Fitch noted that the acquisition will allow both insurers to implement business and organisational co-operations and identify medium-term savings.