A.M. Best Affirms Ratings of Arch Capital Group Ltd. and its Subsidiaries
August 21 2015 - 11:10AM
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 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 RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20150821005513/en/
A.M. Best CompanyGreg ReisnerManaging Senior
Financial Analyst(908) 439-2200, ext.
5224greg.reisner@ambest.comorPeter
DickeyAssistant Vice President(908) 439-2200, ext.
5053peter.dickey@ambest.comorChristopher
SharkeyManager, Public Relations(908) 439-2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyAssistant Vice President, Public Relations(908)
439-2200, ext. 5644james.peavy@ambest.com
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