Internationally, 2002 bore witness to wholesale downgradings by the major rating agencies, while the 'flight to quality' was growing in the face of uncertainty over the future of certain carriers. The higher demand for strong paper comes at a time when rating agencies have refined their methodologies and are looking ever more closely at individual deals as well as overall strategy.

As a generalisation, established Bermudian re/insurers displayed a strong persistence in rating levels, while the class of 2001 all launched with ratings of A- or higher - a prerequisite for attracting business in the prevailing market conditions.

There were, of course, exceptions, as companies such as Commercial Risk Partners, Centre Solutions and Trenwick were downgraded for the third year in a row. Of the three, Commercial Risk is no longer writing, Centre Solutions has shut down its finite business, and Trenwick is now only actively underwriting through its Lloyd's operations. ESG Re's subsidiaries were downgraded from B to BB- late in 2002, then withdrawn at the parent company's request.

Subsequently, ESG Re was delisted from the NASDAQ in February this year following the company's failure to file its quarterly report on Form 10-Q for the quarter ended 30 September 2002. Annuity & Life Re's third downgrade in a row also presaged a stock market delisting.

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