A.M. Best Affirms Credit Ratings of Aspen Insurance Holdings Limited and Its Subsidiaries
November 11 2016 - 9:26AM
Business Wire
A.M. Best has affirmed the Financial Strength Rating
(FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings
(Long-Term ICR) of “a” of Aspen Insurance UK Limited (AIUK)
(United Kingdom), Aspen Bermuda Limited (ABL) (Bermuda),
Aspen American Insurance Company (AAIC) (Dallas, TX) and
Aspen Specialty Insurance Company (ASIC) (Bismarck, ND). The
outlook of the FSR remains stable; the outlook of the Long-Term
ICRs remains positive. At the same time, A.M. Best has affirmed the
Long-Term ICR of “bbb” and the Long-Term Issue Credit Rating
(Long-Term IR) on the unsecured debt and preferred shares of
Aspen Insurance Holdings Limited (Aspen) (Bermuda) [NYSE:
AHL], the non-operating holding company of the Aspen group of
companies. The outlooks of the Long-Term ICR and the Long-Term IRs
remain positive. (Please see below for a detailed listing of the
Long-Term IRs.)
The ratings reflect A.M. Best’s expectation that Aspen’s
consolidated risk-adjusted capitalisation will remain at an
excellent level, in spite of a continuing programme of share
repurchases. A.M. Best expects projected growth in premium volumes,
which is mainly targeted within the U.S. and Middle Eastern
insurance markets, will be supported by internal capital
generation. Additionally, the four subsidiary companies are
expected to maintain strong stand-alone risk-adjusted
capitalisation. AIUK continues to be the main earnings contributor
of the Aspen group, whilst ABL remains important to Aspen’s capital
management strategy, as it provides internal reinsurance to the
other Aspen group companies and access to third-party business
written in Bermuda. Aspen’s U.S. companies, AAIC and ASIC, provide
business diversification for the group and benefit from extensive
reinsurance support from ABL.
The maintained positive outlook on the Long-Term ICRs reflects
this continuing financial strength, the group’s recent record of
excellent operating performance and its increasingly strong
business profile. Over the past five years (2011-2015), Aspen has
compiled a record of generally strong operating performances,
despite the losses from the unprecedented series of natural
catastrophes in 2011. For the four full years since then,
underwriting results have been excellent, with combined ratios
around 90%. However, in the first three quarters of 2016, losses
from weather-related events in the U.S. and Europe, earthquakes in
Taiwan and Japan, and wildfires in Canada, have driven the combined
ratio more than three percentage points higher than at the same
point in 2015. Nevertheless, Aspen’s operating performance for 2016
is expected to remain at a strong level, assuming normal
catastrophe activity for the remainder of the year. A pre-tax
profit of USD 284 million was reported in the first three quarters
of 2016, a good increase from USD 214 million at the same point in
2015, following a strong investment performance.
The performance of Aspen’s U.S.-domiciled subsidiaries has been
a negative rating factor in the past, largely as a result of the
subsidiaries’ high start-up costs relative to net earned premiums.
However, the technical results of these subsidiaries have improved
despite challenging market conditions. These companies are now
making a positive contribution to the group’s profits. A.M. Best
will continue to monitor the performance of these subsidiaries.
Aspen has an increasingly strong business profile in its core
markets, supported by its diversified portfolio of
property/casualty and specialty insurance and reinsurance business.
Diversification has improved significantly in recent years through
growth in insurance lines and increased geographical spread.
Aspen’s access to business is enhanced by its U.S. subsidiaries and
network of branches in Europe, Canada, Dubai, Singapore and
Australia.
The following Long-Term IRs have been affirmed:
Aspen Insurance Holdings Limited—
-- “bbb” on USD 300 million 4.65% senior unsecured notes, due
2023
-- “bbb” on USD 250 million 6% senior unsecured notes, due
2020
-- “bb+” on USD 200 million 7.401% perpetual non-cumulative
preference shares (currently USD 133 million outstanding)
-- “bb+” on USD 275 million 5.95% perpetual non-cumulative
preference shares
-- “bb+” on USD 160 million 7.25% perpetual non-cumulative
preference shares
-- “bb+” on USD 250 million 5.625% perpetual non-cumulative
preference shares
The following indicative Long-Term IRs under the universal shelf
registration have been affirmed:
Aspen Insurance Holdings Limited—
-- “bbb” on senior unsecured debt
-- “bbb-” on senior subordinated debt
-- “bb+” on junior subordinated debt
-- “bb+” on preferred stock
This press release relates to Credit Ratings 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 see A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating
Services, Inc. and/or its subsidiaries.
ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20161111005368/en/
A.M. BestDavid DrummondSenior Financial
Analyst+44 20 7397
0327david.drummond@ambest.comorEdin
ImsirovicSenior Financial Analyst+1 908 439 2200,
ext. 5740edin.imsirovic@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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