Citadel refinances

Citadel Risk has made significant capital changes to the balance sheets of its subsidiaries Citadel Reinsurance Company Limited Bermuda and American Millennium Insurance Company.

The changes inject $25 million into the reinsurer’s balance sheet and $10m into AMIC’s. It has also introduced a reinsurance stop loss to cap AMIC losses. They follow February’s ratings downgrade by AM Best which saw AMIC fall from C- from C++ and its Citadel Reinsurance from B++ to B.

The injection almost triples the company’s surplus capital from $20 million to $55 million and gives it a much better solvency ratio, according to Tony Weller, group chief executive officer of Citadel Risk. It “draws a line” under recent difficulties, he said.

“It has been a tough year for Citadel, and I am extremely pleased to announce this major investment and financial strengthening of the group’s balance sheet,” said Weller.

“The enhanced capital base will allow us to write larger lines and develop AMIC into a wider and more diverse insurance entity. The group will be preparing new submissions for an immediate rerating with AM Best, and the enhanced capital structure will be a positive uplift. I sincerely thank all our clients and partners for their support during a difficult time and look forward to working with them to explore many new opportunities.”