Torus I

A.M. Best Co. has affirmed the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Torus Insurance (Bermuda) Limited (Torus Bermuda) (Bermuda), Torus Insurance (UK) Limited (Torus UK) (United Kingdom) and Torus Specialty Insurance Company (Torus Specialty) (United States). Concurrently, A.M. Best has affirmed the ICR of "bbb-" of Torus Insurance Holdings Limited (Torus) (Bermuda), the group's ultimate parent holding company. The outlook for all ratings remains stable.

A.M. Best expects Torus to maintain strong consolidated risk-adjusted capitalisation. Despite greater than anticipated growth of the group's casualty portfolio, the overall volume of business written is lower than originally planned, driven by lower premiums from property and energy business. Stand-alone risk-adjusted capitalisation at each of the group's underwriting entities is also expected to remain strong.

Torus Bermuda operates as the recipient of the majority of the group's risk through a 65 percent quota share and an aggregate stop loss of Torus UK. In turn, Torus UK provides the same cover to Torus Speciality.

Torus is expected to produce a small consolidated pre-tax profit in 2009, compared to a loss of $30 million in 2008, the group's first year of trading. However, an underwriting loss is anticipated, partly due to the high level of expenses associated with the group's rapid expansion. Results are subject to volatility due to the catastrophe exposure of some classes of business underwritten, although the technical expertise and pricing models embedded in the group's underwriting process are expected to support performance across the cycle.

An offsetting factor for the ratings is Torus's growth in the casualty market. This business accounts for a materially larger proportion of the group's premium income than initially anticipated by A.M. Best and introduces greater uncertainty over future performance.

Although A.M. Best believes Torus has an underwriting team in place with considerable experience writing the targeted casualty lines, the group will be challenged to develop a profitable account in this market in the face of strong competition from more established insurers and reinsurers.