AM Best Affirms Credit Ratings of Arch Capital Group Ltd. And Its Subsidiaries
04 Décembre 2020 - 11:22PM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term
ICR) of “aa-” of Arch Reinsurance Ltd. (Arch) (Bermuda) and its
strategic affiliates. Concurrently, AM Best has affirmed the
Long-Term ICR of “a-” and the Long-Term Issue Credit Ratings
(Long-Term IRs) of Arch Capital Group Ltd. (Arch Capital) (Bermuda)
[NASDAQ: ACGL], the ultimate holding company; Arch Capital Group
(US) Inc (Delaware); and Arch Capital Finance LLC (Delaware). (See
below for a detailed listing of the companies and ratings.) The
outlook of these Credit Ratings (ratings) is stable.
The ratings of Arch reflect the group’s balance sheet strength,
which AM Best categorizes as strongest, as well as its strong
operating performance, favorable business profile and appropriate
enterprise risk management.
The ratings are based on Arch’s historically strong operating
performance, as well as its balance sheet strength, as measured by
Best’s Capital Adequacy Ratio, and strong management team. Arch
continues to perform favorably on most operating metrics while
maintaining a strong risk-adjusted capital position, despite a
significant Stressed Ultimate Loss, as calculated according to AM
Best’s “Evaluating Mortgage Insurance” criteria procedure, and low
risk-adjusted investment market returns. Arch has demonstrated that
it will actively manage the (re)insurance cycles.
The stable outlooks reflect AM Best’s expectations that the
group’s strongest level of balance sheet strength will continue to
be supported by strong and stable operating performance, favorable
reserve development, diverse business profile and well-defined ERM
program.
AM Best also recognizes that the mortgage insurance business
relies heavily on financial models that can vary from actual
results. AM Best utilized a conservative stress scenario for Arch’s
mortgage insurance book of business when calculating stress-tested
risk-adjusted capitalization. Mortgage insurance products have a
relatively long exposure period when compared with most of Arch’s
current property/casualty insurance and reinsurance products, which
can be characterized as medium tail on average. AM Best considered
long-term sources of liquidity in the evaluation of these potential
tail risk events.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” have
been affirmed with stable outlooks for Arch Reinsurance Ltd. and
its following affiliates:
- Arch Reinsurance Company
- Arch Insurance Company
- Arch Specialty Insurance Company
- Arch Property Casualty Insurance Company
- Arch Indemnity Insurance Company
- Arch Insurance Canada Ltd.
- Alwyn Insurance Company Limited
- Arch Insurance (UK) Limited
The following Long-Term IRs have been affirmed with stable
outlooks:
Arch Capital Group Ltd.— -- “a-” on $300
million 7.35% senior unsecured notes, due 2034 -- “bbb” on $450
million 5.25% non-cumulative preferred shares, Series C -- “bbb” on
$330 million 5.45% non-cumulative preferred shares, Series C
Arch Capital Group (US) Inc (guaranteed by
Arch Capital Group Ltd.)— -- “a-” on $500 million 5.144% senior
unsecured notes, due 2043
Arch Capital Finance LLC (guaranteed by Arch
Capital Group Ltd.)— -- “a-” on $500 million 4.011% senior
unsecured notes, due 2026 -- “a-” on $450 million 5.031% senior
unsecured notes, due 2046
The following indicative Long-Term IRs under the existing shelf
registration have been affirmed with stable outlooks:
Arch Capital Group Ltd.— -- “a-” on senior
unsecured debt -- “bbb+” on subordinated debt -- “bbb” on preferred
stock
Arch Capital Group (US) 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 Credit Ratings that have been
published on AM 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 see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20201204005611/en/
Darian Ryan, CPA Senior Financial Analyst +1
908 439 2200, ext. 5449 darian.ryan@ambest.com Christopher
Sharkey Manager, Public Relations +1 908 439 2200,
ext. 5159 christopher.sharkey@ambest.com Steven Chirico,
CPA Director +1 908 439 2200, ext. 5087
steven.chirico@ambest.com Jim Peavy Director, Public
Relations +1 908 439 2200, ext. 5644
james.peavy@ambest.com
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