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A.M. Best Affirms Ratings of Eastern Re Ltd. S.P.C. CONTACTS:
FOR IMMEDIATE RELEASE OLDWICK, NEW JERSEY, U.S.A., May 14, 2009—A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Eastern Re Ltd. S.P.C. (Eastern Re) (Grand Cayman, Cayman Islands). The outlook for both ratings is stable. These ratings recognize Eastern Re’s strategic affiliation with Eastern Alliance Insurance Group (EAIG), its historically profitable operating results as well as its sound stand-alone capitalization. These positive rating factors are partially offset by Eastern Re’s exclusive reliance on EAIG for production of all of its business as well as the mono-line orientation of Eastern Re, which primarily acts as a workers’ compensation reinsurer. Eastern Re is a segregated portfolio company, or cell captive, whose general cell is an indirect wholly owned subsidiary of Eastern Insurance Holdings, Inc. (EIHI) [NASDAQ: EIHI], a Pennsylvania holding company, which also indirectly owns Eastern Alliance Insurance Company, Allied Eastern Indemnity Company and Eastern Advantage Assurance Company. These companies are Pennsylvania-domiciled workers’ compensation insurance companies, which produce business through regional agents. These companies, which are the non-life risk-bearing entities of EAIG, provide both fronting capabilities and reinsurance protection to Eastern Re. Additionally, Eastern Re utilizes the expertise of Employers Alliance Inc., a Pennsylvania-domiciled insurance services provider that acts as a third-party administrator and provides services for all of the cells of Eastern Re. Eastern Re issues preferred shares to 15 cell owners, which are agent or group captives that purchase workers’ compensation coverage from EAIG. These agent and group captives participate in the profits and losses of the cell for which they are the owners. This dynamic provides added incentive to the agent or group captive to prevent adverse selection for the business being assumed by Eastern Re. A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world. For current Best’s Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive. The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. ### |
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