Flagstone Reinsurance Holdings Ltd.'s ratings from AM Best will remain unchanged following the corporate re-organisation that will see the company's Bermuda underwriting unit merge into its Swiss operation.

Rating agency Best said yesterday that the restructuring would give clients access to a larger balance sheet, thereby making Flagstone a more attractive reinsurer.

Flagstone's holding company will remain in Bermuda and little will change in day-to-day operations, as the merged entity, to be known as Flagstone Reassurance Suisse SA, will continue to write business through its Bermuda branch.

"This restructuring consolidates the capital into one main operating entity resulting in capital efficiencies and streamlines the evaluation of capital adequacy within the rating process," Best said in a statement released yesterday.

"Following the completion of this restructuring, the ratings of Flagstone Re will be terminated, and the ratings of Flagstone Reassurance will be analysed on a stand-alone basis. However, it will have no effect on the financial strength rating of A- (excellent) and issuer credit rating of "a-" of Flagstone Reassurance."

Best also commented on Flagstone's offer to purchase the shares of Cyprus-based Alliance Re that it does not already own.

"This transaction further develops Flagstone Holdings' global operating strategy and is in line with other strategic investments made by the organisation," Best said.