A.M. Best Co. has upgraded the financial strength rating (FSR) to
A+ (Superior) from A (Excellent) and issuer credit ratings (ICR) to
“aa-” from “a+” of AXIS Specialty Limited (AXIS) and its
operating affiliates. Concurrently, A.M. Best has upgraded the ICR to
“a-” from “bbb+” and all existing debt ratings of AXIS’ parent, AXIS
Capital Holdings Limited (ACHL) (both domiciled in Hamilton,
Bermuda) [NYSE: AXS]. The outlook for all ratings has been revised to
stable from positive. (See below for a detailed list of the companies
and ratings.)
The ratings reflect AXIS’ superior risk-adjusted capitalization,
long-term track record of strong operating performance through varied
market conditions and robust enterprise risk management controls. AXIS’
operating strategy has historically emphasized underwriting
profitability with a balanced risk profile. Given the current soft
casualty market conditions, the company is well positioned with a
diversified book of business and an expanding worldwide infrastructure.
AXIS’ book of business has historically emphasized short to medium-tail
lines and focuses on specialty risks including, but not limited to,
property, marine, professional lines, accident and health, credit and
bond, agriculture, along with property catastrophe coverages.
AXIS’ historical operating performance has been strong, which places it
among the top of its Bermudian peer group. In A.M. Best’s opinion, AXIS’
solid performance is attributable to its highly developed and integrated
risk management controls and strong systems capabilities. Furthermore,
AXIS retains a very strong level of risk-based capitalization under
various A.M. Best stress scenarios.
Partially offsetting these positive rating factors is AXIS’ exposure to
large catastrophe losses as well as the current soft casualty market
environment. These challenges and other rating factors, which could lead
to a downgrading of AXIS’ ratings or a revision in its outlook to
negative, include unfavorable operating profitability trends, outsized
catastrophe or investment losses relative to its peers, significant
adverse loss reserve development and/or a material decline in its
risk-adjusted capital. Alternatively, factors that could lead to an
upgrading of the company’s ratings include continued long-term favorable
operating profitability coupled with maintaining strong risk-adjusted
capital levels.
The FSR has been upgraded to A+ (Superior) from A (Excellent) and ICRs
to “aa-” from “a+” for AXIS Specialty Limited and its following
operating affiliates:
-
AXIS Re SE
-
AXIS Reinsurance Company
-
AXIS Specialty Europe SE
-
AXIS Surplus Insurance Company
-
AXIS Insurance Company
The following debt ratings have been upgraded:
AXIS Capital Holdings Limited—
-- to “a-” from “bbb+” on
$500 million 5.75% senior unsecured notes, due 2014
-- to “bbb”
from “bbb-” on $250 million 7.50% non-cumulative preferred shares,
Series B
-- to “bbb” from “bbb-” on $400 million 6.875%
non-cumulative preferred shares, Series C
-- to “bbb” from “bbb-”
on $200 million 5.5% non-cumulative preferred shares, Series D
AXIS Specialty Finance LLC (guaranteed by AXIS Capital Holdings
Limited)—
-- to “a-” from “bbb+” on $500 million 5.875%
senior unsecured notes, due 2020
The following indicative ratings have been upgraded under the current
shelf registration:
AXIS Capital Holdings Limited—
-- to “a-” from “bbb+” on
senior unsecured debt
-- to “bbb+” from “bbb” on subordinated debt
--
to “bbb” from “bbb-” on preferred stock
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
Copyright Business Wire 2013