Last checked at 22 Feb 2010 07:00
OMEGA INSURANCE HOLDINGS LIMITED
Re: A.M. Best Rating Review
Further to its announcement of 18 February 2010, Omega Insurance Holdings Limited ("Omega"), the international insurance and reinsurance group based in Bermuda, has been informed by A.M. Best that it has, with effect from 19 February 2010, placed the ratings of Omega, Omega Specialty Insurance Company Limited ("OSIL") and Omega US Insurance, Inc. ("Omega US") under review with negative implications. A.M. Best stated that "the ratings of Omega, OSIL and Omega US have been placed under review with negative implications due to uncertainty regarding Omega's board composition, operational management and future strategy".
As previously announced, the Company has received communications on behalf of Invesco Asset Management Limited calling for the Company to convene a special general meeting to consider resolutions to remove Walter Fiederowicz and Christopher Clarke as Directors and to appoint John Coldman and five other persons as additional proposed directors (the "Proposed Directors"), with the result that the Proposed Directors would together control the Board. In addition, Mr Coldman, whom Invesco propose would be elected Chairman, has requested that the remaining non-executive Directors, Clifford Palmer, Coleman Ross and Nicholas Warren, agree to stand down when he asks them to do so and in any case before the Company's 2010 annual general meeting. The Board has been in dialogue with most major Shareholders of the Company and, while the communications on behalf of Invesco did not constitute legally binding notices of requisition under Bermuda law, the Company acknowledges and wishes to facilitate the right of all Shareholders to have the opportunity to vote on the resolutions for the appointment of the Proposed Directors and accordingly, as announced on 18 February 2010, convened a special general meeting which is the appropriate forum to effect this change of control of the Board.
In light of their concerns, A.M. Best had recently requested a meeting with Mr. John Coldman in order to seek clarification on the background to the proposed changes to the Board and Mr. Coldman's plans for the management team and future strategy. Mr. Coldman declined A.M. Best's request.
Richard Tolliday, CEO of Omega, commented: "We have kept in close contact with AM Best throughout the recent months but unfortunately, as was made clear in the SGM circular published by Omega on 18 February, the Board has been provided by Mr. Coldman with only limited information that we have been able to pass on to A.M. Best. Their decision to put the ratings under review has been prompted by uncertainty about any future Board's actions and not by any concerns about current trading or Omega's current financial strength. Omega is a strong business with a strong track record and a robust balance sheet. Syndicate 958's Best rating of "A" (Excellent) remains unchanged at the Lloyd's market level. All of Omega's operating units will continue to provide the consistency and quality of service expected by their clients."
The full text of the A.M. Best announcement can be found at:
http://www3.ambest.com/frames/frameserver.asp?site=press&tab=1&altsrc=14&altnum=&refnum=65494653775046536656
Media Enquiries:
Byron Ousey / Michael Turner, Kreab Gavin Anderson +44 (0)20 7074 1800
Analysts Enquiries:
Lucia Langella Rahn / Andrew Jones, Kreab Gavin Anderson +44 (0)20 7074 1800
Notes to Editors
Omega became the holding company of the Omega group of companies (the "Omega Group") on 9 November 2006 when the scheme of arrangement of Omega Underwriting Holdings PLC (the Omega Group's previous holding company and now wholly-owned by Omega) ("OUH") became effective. On the same date the Common Shares of Omega were admitted to trading on AIM, the admission of OUH's shares to trading on AIM was cancelled and OUH was re-registered as a private limited company.
On 7 July 2009, the common shares of Omega were admitted to the Official List of the London Stock Exchange and to trading on its main market for listed securities. On the same date, the admission of Omega's common shares to trading on AIM was cancelled.
The Omega Group, through its wholly owned subsidiary, Omega Underwriting Agents Limited, acts as a Lloyd's managing agent for Syndicate 958 and in February 2006 established a new insurance and reinsurance business, Omega Specialty Insurance Company Limited ("Omega Specialty"), based in Bermuda. In September 2006 Omega incorporated a new surplus lines insurer, Omega US Insurance, Inc. ("Omega US Insurance"), in Delaware which is held under a Delaware incorporated intermediate holding company Omega US Holdings, Inc.
Syndicate 958
Syndicate 958's capacity for the 2010 year of account is £280 million. The Syndicate has made an underwriting profit in every closed year of account since its inception in the 1980 year of account. The Syndicate has focused predominantly on short-tail, diversified property orientated insurance and reinsurance with a focus on small to medium sized insureds, with whom the Omega Group has built long-standing track records.
On 13 July 2009, the A.M. Best Company, Inc. reaffirmed the Syndicate's Financial Strength Rating of 'A' (Excellent) and an Issuer Credit Rating of 'a+' (Excellent).
Omega Specialty
Omega Specialty received its license from the Bermuda Monetary Authority in February 2006 as a Class 3 insurer and has been reclassified as a Class 3B insurer. It was capitalised at US$172 million. Since then, Omega Specialty's premium income has been predominantly derived from its reinsurances of Syndicate 958 and the Omega Group's Lloyd's corporate member, Omega Dedicated, together with its increasing book of third party reinsurances where it seeks to underwrite business of a similar type and composition to be complementary to that underwritten by Syndicate 958.
On 13 July 2009, the A.M. Best Company, Inc. reaffirmed Omega Specialty's Financial Strength Rating of 'A-' (Excellent).
Omega US Insurance
Omega US Insurance is an insurance company licensed in the state of Delaware and underwrites on a surplus lines basis in other US States. Omega US Insurance is currently eligible to write business in 42 US jurisdictions (including on an admitted basis in Delaware) and applications are pending in further states. It was capitalised at US$50 million from the net proceeds of a share placing by OUH in October 2006.
On 3 December 2007, Omega US Insurance received a Financial Strength Rating from A.M. Best Company, Inc. of 'A-' (Excellent). The rating was reaffirmed on 3 February 2009.