Fitch Comments on Max Capital's Planned Acquisition of Imagine's Lloyd's Operation

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has reviewed Max Capital Group Ltd.'s (Max Capital) planned acquisition of Imagine Group (UK) Limited (Imagine Lloyd's) from Imagine Insurance Company Limited (Imagine). This transaction is not anticipated to result in any change to the ratings of Max Capital or its subsidiaries. A full rating list is shown below. The Rating Outlook remains Stable.

Fitch views the acquisition of a Lloyd's insurance operation as consistent with Max Capital's strategy of maintaining flexibility to shift its disciplined underwriting approach based on changing market conditions and expected returns on capital. While Fitch recognizes the benefits of this flexible strategy, it also creates additional execution risk derived from Max Capital's growing diversified specialty product strategy. Fitch expects Max Capital to maintain its disciplined underwriting approach in the overall competitive market and soft rate environment.

Max Capital's expansion into the London market serves to complement the company's insurance and reinsurance operations in Bermuda, Ireland and the U.S. and thus further diversify the company's property/casualty product and geographic exposure. This acquisition follows the launch of Max Specialty Insurance Company in 2007 as the company's U.S.-based excess and surplus lines platform.

Imagine Lloyd's three syndicates have GBP198.8 million of capacity for 2008 (69% is capitalized by Imagine Lloyd's) writing in various lines of business including property catastrophe, accident & health, professional indemnity and medical malpractice. The transaction is expected to close by the early fourth quarter 2008.

The following ratings remain unchanged by Fitch:

Max Capital Group Ltd.

--Issuer Default Rating (IDR) at 'A-'.

Max USA Holdings Ltd.

--IDR at 'A-';

--$100 million due 2017 at 'BBB+'.

Max Bermuda Ltd.

Max Re Europe Limited

Max Insurance Europe Limited

Max Specialty Insurance Company

--Insurer Financial Strength at 'A'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.