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A.M. Best Has Removed From Under Review the Ratings of Flagstone Reassurance Suisse S.A. and Its Subsidiary
[December 20, 2012]

A.M. Best Has Removed From Under Review the Ratings of Flagstone Reassurance Suisse S.A. and Its Subsidiary

OLDWICK, N.J. --(Business Wire)--

A.M. Best Co. has removed from under review with developing implications and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Flagstone Reassurance Suisse S.A. (Martigny, Switzerland) and Flagstone Alliance Insurance and Reinsurance PLC (Limassol, Cyprus) (together known as Flagstone Re). The outlook assigned to these ratings is stable.

A.M. Best also has withdrawn the ICR of "bbb-" of Flagstone Reinsurance Holdings S.A. (Flagstone Holdings) (Luxembourg), given its change in status to an intermediate holding company of Validus Holdings, Ltd. Concurrently, A.M. Best has withdrawn the indicative ratings of "bb" on preferred stock, "bb+" on subordinated debt and "bbb-" on senior debt of Flagstone Holdings as the securities available under its shelf registration are no longer in existence.

The ratings reflect Flagstone Re's excellent level of risk-based capitalization on a stand-alone basis, as well as the commitment and experience of the management team at Validus Reinsurance Ltd. (Validus Re) in the successful and orderly integration of the acquired business operations. The rtings also recognize the significant remedial actions taken by the former management of Flagstone to streamline the organizational structure, de-risk the balance sheet and significantly reduce overall expenses. The stable outlook reflects A.M. Best's opinion that Flagstone Re's policyholders are in a more secure position following the change in ownership to Validus Re. Validus Re has displayed an historically strong operating performance, capitalization and a strong enterprise risk management program, which will inure to the benefit of Flagstone Re's policyholders. Financial forecasts indicate a continuation of strong risk-adjusted capital levels, which are further enhanced by the support provided by Validus Re.

Given the current position of Flagstone Re as an inactive underwriter, it is unlikely that the ratings will be upgraded. Rating factors that could lead to a negative outlook would be the result of any negative changes in Validus Re's ratings.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding Universal BCAR"; "Catastrophe Analysis in A.M. Best Ratings"; "Insurance Holding Company and Debt Ratings"; and "Rating Members of Insurance Groups." Best's Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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