A.M. Best has affirmed the financial strength rating (FSR) of A+
(Superior) and the issuer credit ratings (ICR) of “aa-” of AXIS
Specialty Limited (AXIS) and its operating affiliates. Concurrently,
A.M. Best has affirmed the ICR of “a-” and the existing debt ratings of
AXIS’ parent, AXIS Capital Holdings Limited (ACHL) (both
domiciled in Hamilton, Bermuda) [NYSE: AXS]. The outlook for all ratings
is stable. (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.
Historically, AXIS’ book of business focused on short to medium-tail
lines and concentrates on specialty risks which can be complex to
underwrite, reserve and risk manage. AXIS’ operating strategy has
emphasized underwriting profitability with balanced risk taking. Given
the organization’s risk profile, enterprise risk management controls are
imperative to appropriately identify, quantify and mitigate risks prior
to becoming problematic issues. A.M. Best believes that AXIS is well
suited to execute its business plan. The organization remains nimble and
given the current soft casualty market conditions, remains well
positioned with a diversified book of business and an expanding
worldwide infrastructure.
AXIS’ historically strong operating performance places it among the top
of its Bermuda 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 casualty market
environment, which has challenging underwriting conditions. Other rating
factors that could lead to a downgrade 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 upgrade of the company’s ratings include continued long-term
favorable operating profitability coupled with maintaining strong
risk-adjusted capital levels.
The FSRs of A+ (Superior) and ICRs of “aa-” for AXIS Specialty Limited
and its following operating affiliates have been affirmed:
-
AXIS Re SE
-
AXIS Reinsurance Company
-
AXIS Specialty Europe SE
-
AXIS Surplus Insurance Company
-
AXIS Insurance Company
The following debt ratings have been affirmed:
AXIS Capital Holdings Limited—
-- “a-” on $500 million 5.75% senior unsecured notes, due 2014
-- “bbb” on $250 million 7.50% non-cumulative preferred shares, Series B
-- “bbb” on $400 million 6.875% non-cumulative preferred shares, Series C
-- “bbb” on $200 million 5.5% non-cumulative preferred shares, Series D
AXIS Specialty Finance LLC (guaranteed by AXIS Capital Holdings
Limited)—
-- “a-” on $500 million 5.875% senior unsecured notes, due 2020
The following indicative ratings have been affirmed under the current
shelf registration:
AXIS Capital Holdings Limited—
-- “a-” on senior unsecured debt
-- “bbb+” on subordinated debt
-- “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.
Key insurance criteria reports utilized:
• Catastrophe Analysis in A.M. Best Ratings
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers
• Understanding Universal BCAR - A.M. Best's Capital Adequacy Ratio for
Insurers
• Analyzing Insurance Holding Company Liquidity
• Insurance Holding Company and Debt Ratings
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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
Copyright Business Wire 2014