CHANNELS

Subscribe to the InfoTech eNewsletter

infoTECH News

TMCNet:  Fitch Comments on Tower Group on Reserve Charge

[December 18, 2013]

Fitch Comments on Tower Group on Reserve Charge

CHICAGO --(Business Wire)--

Fitch Ratings comments that Tower Group International, Ltd.'s (TWGP) filing yesterday announcing that it will be taking additional adverse reserve development in the third quarter of 2013 (3Q'13) of approximately $75 million-$105 million in addition to the $364 million the company took in 2Q'13 is outside of previous rating expectations.

The third quarter development relates to workers' compensation, commercial multi-peril liability, other liability, and commercial auto liability, which were the same lines experiencing unfavorable loss experience that led to TWGP's 2Q'13 charge.

However, TWGP's announcement of the sale of its investment in Canopius Group Ltd.'s sale to Bregal Capital LLP for approximately $70 million and using the proceeds to fund payment of its outstanding $70 million bank line is a favorable development. The company's next maturing debt obligation is $150 million of 5% convertible senior notes due Sept. 15, 2014.

The company continues to explore strategic alternatives with the services of an investment banker.

Fitch plans on reviewing the ratings once the company files third quarter GAAP and statutory statements, which are anticipated to be released shortly. The ratings are listed below.

Tower Group International, Ltd.

--Issuer Defaut Rating (IDR) 'B', Rating Watch Negative.

Tower Group, Inc.

--IDR 'B', Rating Watch Negative;

--5% senior convertible debt rating 'B-'.

Tower Insurance Company of New York

Tower National Insurance Company

Preserver Insurance Company

CastlePoint National Insurance Company

York Insurance Company of Maine

Hermitage Insurance Company

CastlePoint Florida Insurance Company

North East Insurance Company

Massachusetts Homeland Insurance Company

CastlePoint Insurance Company

Kodiak Insurance Company

--Insurer Financial Strength ratings 'BB', Rating Watch Negative.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


[ InfoTech Spotlight's Homepage ]


blog comments powered by Disqus

FOLLOW US

Subscribe to InfoTECH Spotlight eNews

InfoTECH Spotlight eNews delivers the latest news impacting technology in the IT industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter