A.M. Best Affirms Ratings of Arch Capital Group Ltd and Its Subsidiaries
20 Mars 2014 - 3:00PM
Business Wire
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 affirmed the ICR of “bbb+” of
Arch Capital Group (US) Inc. (Delaware). Concurrently, A.M.
Best has affirmed the ICR of “a-” as well as all debt 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 (ERM). The ratings also acknowledge 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 is capable of writing a
broad range of property/casualty insurance and reinsurance on a
worldwide basis and focuses on specialty lines. Arch Capital
recently acquired a mortgage insurance operating platform, which
will serve as the foundation for Arch to enter the U.S. mortgage
insurance market and further diversify its product offerings.
Since Arch’s inception, overall operating results have been
strong and certain metrics have exceeded most peers in the sector.
In addition, Arch has historically reported stable and consistent
financial results with lower levels of volatility than many of its
peers. Arch has maintained a prudent investment portfolio and
conservative reserving philosophy, which helps to uphold its
balance sheet strength. Underpinning all of Arch’s activities is
that the organization has successfully evolved its ERM framework
over time as the company continues to become more complex.
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 and/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 debt 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 debt
-- “bbb+” on subordinated debt
-- “bbb” on preferred stock
Arch Capital Group (U.S.) Inc.
(guaranteed by Arch Capital Group Ltd)—
-- “a-” on senior 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.
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.
A.M. BestGreg ReisnerManaging Senior Financial
Analyst(908) 439-2200, ext.
5224greg.reisner@ambest.comorRobert DeRoseVice
President(908) 439-2200, ext.
5453robert.derose@ambest.comorRachelle MorrowSenior
Manager, Public Relations(908) 439-2200, ext.
5378rachelle.morrow@ambest.comorJim PeavyAssistant
Vice President, Public Relations(908) 439-2200, ext.
5644james.peavy@ambest.com
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