A.M. Best Affirms Ratings of Argo Group International Holdings, Ltd. & Its Subsidiaries; Assigns Ratings to ARIS Title Insura...
October 22 2015 - 3:51PM
Business Wire
A.M. Best has affirmed the financial strength rating
(FSR) of A (Excellent) and the issuer credit ratings (ICR) of “a”
of Argo Re Ltd. (Argo Re) (Hamilton, Bermuda) and its
subsidiaries. A.M. Best also has affirmed the ICR and the issue
ratings of “bbb” of the parent holding company, Argo Group
International Holdings, Ltd. (Argo Group) (Hamilton, Bermuda)
[NASDAQ:AGII]. Concurrently, A.M. Best has affirmed the ICR of
“bbb” and the issue rating of “bbb” on $143.75 million 6.5% senior
unsecured notes due 2042 of Argo Group US, Inc. (Argo US)
(San Antonio, TX). These senior notes are fully and unconditionally
guaranteed by Argo Group. The outlook for these ratings is stable.
(See below for a detailed listing of the companies and
ratings.)
Additionally, A.M. Best has assigned an FSR of A (Excellent) and
an ICR of “a” to ARIS Title Insurance Corporation (ARIS
Title) (New York, NY). The outlook assigned to both ratings is
stable.
The rating affirmations reflect Argo Re’s solid risk-adjusted
capitalization, historically strong operating performance utilizing
demonstrated product expertise in niche focus areas, proven
fundamentals across numerous lines of coverage, a strong business
profile as one of the leading organizations focused on writing
surplus lines and specialty commercial business, and solid
liquidity. The specialty U.S. operations represent the majority of
Argo Group’s premium writings. These are managed holistically with
respect to capital, investment strategy and market presence. The
ratings also reflect the diversified insurance and reinsurance
platforms within the Argo group of companies and the financial
flexibility afforded by its publicly traded parent, Argo Group.
Over the near term, A.M. Best expects that Argo Re’s results
should continue to be positively influenced by actions management
has undertaken to reduce its worldwide property exposure and
improve overall operational efficiencies. These positive rating
factors are partially offset by competitive pressures, low new
money investment yields, the effects from sluggish economic
conditions and Argo Group’s elevated expense structure. A.M. Best
also remains somewhat concerned with recent unfavorable loss
reserve development patterns in certain operating entities.
Nonetheless, the outlooks reflect A.M. Best’s expectation that
operating performance and capitalization will continue to support
the ratings.
The ratings assigned to ARIS Title are based upon the explicit
support provided by two affiliates and its affiliation with Argo
Group. The explicit support provided primarily by Argo Group’s lead
insurer, Argo Re Ltd., and an affiliate, Argonaut Great
Central Insurance Company, is in the form of an intercompany quota
share agreement.
A.M. Best believes that Argo Re and its subsidiaries are
well-positioned at their current rating levels. Key drivers that
could lead to upward rating movement or an enhancement in the
rating outlook over the long term would be the ability to further
enhance the underwriting and operating results of Argo Re
encompassing all core business segments. Downward rating pressure
or a negative change in the rating outlook could result if there
were material deterioration in the organization’s underwriting
performance due to material adverse loss reserve development or
outsized losses in relation to its peer group that results in a
material decline in risk-adjusted capital.
The FSR of A (Excellent) and the ICRs of “a” have been affirmed
for Argo Re Ltd. and its following subsidiaries:
- ArgoGlobal SE
- Argonaut Great Central Insurance
Company
- Argonaut Insurance Company
- Argonaut Limited Risk Insurance
Company
- Argonaut-Midwest Insurance
Company
- Argonaut-Southwest Insurance
Company
- Colony Insurance Company
- Peleus Insurance Company
- Colony Specialty Insurance
Company
- Rockwood Casualty Insurance
Company
- Select Markets Insurance
Company
- Somerset Casualty Insurance
Company
The following indicative issue ratings available under various
shelf registrations have been affirmed:
Argo Group International Holdings. Ltd. –
-- “bbb” on senior unsecured debt
-- “bbb-” on subordinated debt
-- “bb+” on preferred stock
Argo Group US, Inc. –
-- “bbb” on senior unsecured debt
-- “bbb-” on subordinated debt
Argo Group Statutory Trust –
-- “bb+” on preferred stock
The following issue rating has been affirmed:
Argo Group US, Inc. –
-- “bbb” on $143.75 million 6.5% senior unsecured notes, due
2042
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/20151022006560/en/
A.M. BestSusan Molineux, 908-439-2200, ext.
5829Senior Financial
Analystsusan.molineux@ambest.comorChristopher
Sharkey, 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorHenry
Witmer, 908-439-2200, ext. 5097Assistant Vice
Presidenthenry.witmer@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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