A Bermuda based reinsurer is to hold talks with A.M. Best after the rating agency placed its ratings under review with negative implications.

Catlin Insurance Company Ltd. said it was "puzzled" by the announcement, which Best said it made because it was concerned aboout Catlin's consolidated catastrophe exposure and the likely future impact of major events on its risk adjusted capitalisation.

Catlin said in a statement that it believed such concerns were unwarranted and it would work immediately to address any concerns A.M. Best may have concerning the company's catastrophe exposure.

"We are puzzled by A.M. Best's decision to place the ratings of Catlin Group companies under review, especially in the light of our performance and achievements during 2006," Catlin chief executive Stephen Catlin said.

"Catlin is widely regarded as having a conservative underwriting philosophy and strong focus on all aspects of risk management.

"We will concentrate our efforts to engage in constructive communication with A.M. Best to alleviate any concerns Best may have regarding Catlin's catastrophe exposures."

A statement from Catlin said during the past year, Catlin has "strengthened its financial security and made the Group more resilient in the event of a major catastrophe".

The Group has reduced by one-third its exposure to natural catastrophe risk compared with a year earlier.

Catlin has also further diversified its already balanced underwriting portfolio to increase the amount of non-catastrophe related risk it writes.

It has also increased the Group's capital by approximately US$65 million through a placement of new common shares.

"Catlin's strong first half 2006 underwriting performance produced net income of US$147.3 million and a combined ratio of 84.7 percent," Mr. Catlin said.

Catlin Insurance Company Ltd. (Catlin Bermuda) and Catlin Insurance Company (UK) Limited (Catlin UK) have financial strength ratings of 'A' (Excellent) and issue credit ratings of 'a' from A.M. Best. Catlin Group Limited has an issuer credit rating of 'bbb' from A.M. Best.

Lloyd's Syndicate 2003 (the Catlin Syndicate) has an 'A' (Excellent) Lloyd's Syndicate Rating, which is not under review by A.M. Best.

Catlin shares closed down 1.9 percent at 484-1/2 pence, valuing the insurer at about ?800 million ($1.5 billion).