New chief and board members resolve rating agency’s concerns

Rating agency AM Best has removed the ratings of Omega Insurance Holdings Limited (Omega) and its subsidiary Omega Specialty Insurance Company Limited (OSIL) from under review with negative implications and assigned them a stable outlook.

Omega has a bbb issuer credit rating from the agency, while OSIL has a financial strength rating of A- and an issuer credit rating of a-.

The ratings were placed under review because of the uncertainty of Omega’s board composition, operational management and future strategy. Following the appointment of a new board and chief executive officer and a wide-ranging review of Omega’s operations by the new chairman and chief executive officer, AM Best said its concerns have been alleviated.

Omega overhauled its board of directors in March, appointing John Coldman, James Bryce, Robin Spencer-Arscott, Jonathan Betts, David Cooper and Ernest Morrison as non-executive directors, with Coldman as chairman. Existing directors Walter Fiederowicz, Christopher Clarke, Clifford Palmer, Coleman Ross and Nicholas Warren all stepped down.

It also replaced former chief executive Richard Tolliday with new CEO Richard Pexton.

AM Best said OSIL’s ratings reflect the agency’s expectation that OSIL’s risk-adjusted capitalisation will remain excellent in 2010, as the company continues to benefit from the funds transferred from Omega following a successful capital-raising exercise at the end of 2008. OSIL’s risk-adjusted capitalisation is further enhanced by a comprehensive reinsurance programme that limits its exposure to major losses, according to AM Best.