A.M. Best has affirmed the financial strength rating (FSR) of A+
(Superior) and the issuer credit ratings (ICR) of “aa-” of Arch
Reinsurance Ltd. (Arch) (Bermuda) and its strategic affiliates. A.M.
Best also has upgraded the ICR to “a-” from “bbb+” of Arch Capital
Group (US) Inc. (Delaware). Concurrently, A.M. Best has affirmed the
ICR of “a-” as well as all issue ratings of the ultimate holding
company, Arch Capital Group Ltd (Arch Capital) (Bermuda) [NASDAQ:
ACGL]. The outlook for all ratings is stable. (See below for a detailed
listing of the companies and ratings.)
The affirmations reflect Arch’s continued superior operating
performance, consistently excellent capitalization and demonstrated
enterprise risk management. The ratings also consider the depth and
experience of the organization’s management team. Arch maintains a very
strong underwriting culture and focuses on actively managing the cycle.
The company has the agility to enter and exit chosen lines of business
as market conditions dictate. The company is capable of writing a broad
range of property/casualty insurance and reinsurance on a worldwide
basis and focuses on specialty lines. In addition, Arch Capital has been
growing its mortgage insurance operating platform, which will help to
further diversify its product offerings.
Since Arch’s inception, overall operating results have been very strong.
In addition, Arch has historically reported stable and consistent
financial results with lower levels of volatility than many of its
peers. Arch has a conservative reserving philosophy, which helps to
uphold its balance sheet strength.
Partially offsetting these positive rating attributes are the current
soft market conditions through which Arch, as well as all industry
participants, must navigate.
Factors that could result in negative rating pressure include
unfavorable operating profitability trends, outsized catastrophe or
investment losses relative to Arch’s peers, significant adverse loss
reserve development or a material decline in risk-adjusted capital.
However, factors that could lead to a positive outlook or rating
upgrades would be the continuation of long term, consistently strong
operating profitability relative to its peers and maintenance of strong
risk-adjusted capital levels.
The FSR of A+ (Superior) and the ICRs of “aa-” have been affirmed for
Arch Reinsurance Ltd. and its following affiliates:
-
Arch Reinsurance Company
-
Arch Insurance Company
-
Arch Specialty Insurance Company
-
Arch Excess & Surplus Insurance Company
-
Arch Indemnity Insurance Company
-
Arch Insurance Canada Ltd.
-
Arch Insurance Company (Europe) Ltd
The following issue ratings have been affirmed:
Arch Capital Group Ltd—
-- “a-” on $300 million 7.35% senior unsecured notes, due 2034
-- “bbb” on $325 million 6.75% non-cumulative preferred shares, Series C
The following indicative ratings have been affirmed for debt securities
available under the existing shelf registration:
Arch Capital Group Ltd—
-- “a-” on senior unsecured debt
-- “bbb+” on subordinated debt
-- “bbb” on preferred stock
Arch Capital Group (U.S.) Inc. (guaranteed by Arch Capital Group
Ltd)—
-- “a-” on senior unsecured debt
-- “bbb+” on subordinated debt
-- “bbb” on preferred stock
This press release relates to rating(s) that have been published on
A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please visit A.M. Best’s Ratings
& Criteria Center.
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 © 2015 by A.M. Best Company, Inc. ALL RIGHTS
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