Best said it feels that the insurer's initial capitalization of $500 million is sufficient to support projected net premium income of $260 million in 2006, taking into account the company's likely level of exposure should it experience an adverse loss environment.

Hiscox Bermuda is expected to achieve a loss ratio of approximately 50 percent at year-end 2006, subject to catastrophe experience.

Best added that the performance is likely to be supported by its underwriting portfolio of internal Hiscox group reinsurance of accounts with a proven track record of profitability.

The business, Best said, is likely to be comprised of approximately 50 percent of Hiscox Bermuda's gross premium. Hardening rates in certain lines of business will also support the company's prospective performance.

Best also affirmed the financial strength rating of "A-minus-(Excellent)" and the issuer credit rating of "a-minus" of Hiscox Insurance Company Ltd. based in London. It also affirmed the credit rating of "triple-b-minus" of Hiscox plc, the ultimate parent of Hiscox. The outlook for all these ratings is stable.

The rating service also has assigned a Syndicate Rating of "A-(Excellent)" and an issuer credit rating of "a" to Lloyd's Syndicate 33, which is managed by Hiscox Syndicates Limited. The outlook for both ratings is stable.