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Maiden Holdings and its Affiliates Receive Rating Action

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Maiden Holdings, Ltd.’s (MHLD - Free Report) issuer credit rating (ICR) has been upgraded to “bbb” from “bbb-” by A.M. Best. The ICR of Maiden Holdings North America, Ltd., a subsidiary of Maiden Holdings, was also upped to “bbb” from “bbb-“.

Concurrently, the rating giant upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and the issuer credit ratings (ICR) to “a” from “a-” for Maiden Reinsurance Ltd. and its reinsured affiliate, Maiden Reinsurance North America, Inc. These are subsidiaries of Maiden Holdings.

The rating upgrade came on the back of Maiden Re’s continued profitable underwriting and operational performance within its niche market segments, robust risk-adjusted capitalization and the operational benefits, which Maiden Re derives as a quota share partner with a related party, AmTrust International Insurance Ltd., the Bermuda reinsurance subsidiary of AmTrust Financial Services, Inc. .

Given the stiff competition in core reinsurance markets and the client concentration, Maiden Holdings experiences continued execution risk in meeting its business objectives and plans. This, in turn, partially offsets the positive rating factors assigned to the property and casualty (P&C) insurer and its affiliates.

While the rating agency does not expect any ratings upgrade in the near term, sustained underwriting and operating results by Maiden Re along with sturdy risk-adjusted capitalization might lead to upgrade in mid-to-long term. However, the ratings might be downgraded if operating or underwriting performance deteriorates.

Rating affirmations or upgrades from credit rating agencies play an important role in retaining investors’ confidence in the stock as well as maintaining credit worthiness in the market. Hence, it is expected that such ratings will help the company write more business in the future.

Zacks Rank and Stocks to Consider

Currently, Maiden Holdings carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same space include Allied World Assurance Company Holdings, AG (AWH - Free Report) , National Interstate Corporation (NATL - Free Report) . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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