Brit downgraded by Fitch
Brit Insurance Limited's (BIL) Insurer Financial Strength (IFS) rating has been downgraded to 'BBB' from 'A', by rating agency Fitch.
Its holding company, Brit Insurance Holdings B.V. (BIH BV), has had its Long-term Issuer Default Rating (IDR) affirmed at 'BBB+'.
Both ratings have been given a stable outlook by Fitch. In a statement it said: “The decision to downgrade BIL's IFS rating reflects the likely rating level for the post-sale, run-off phase of BIL's insurance policies. Fitch believes that the amount of residual capital that will be retained in BIL, post-sale, to support the run-off company is likely to be at or just above the required regulatory minimum.
“This action is taken despite the commitment by Brit Insurance group to maintain BIL's capital to a level commensurate with the previous 'A' rating level, prior to the completion of the sale, The agency had previously stated that it would seek to resolve the Rating Watch Negative on BIL's IFS once the outcome of the strategic review was known, and would consider the financial strength of the acquirer in the event of a sale.
“The affirmation of BIH BV's IDR reflects the agency's view that the remaining Brit Insurance group's financial profile has not materially changed at this time.
"While the two-part sale of BIL reduces the size and diversity of group, Fitch continues to maintain a positive view of actions taken by management to streamline existing operations and exit underperforming insurance classes. The agency will continue to assess the effect of on-going management actions on the financial profile of the Brit group.”