A.M. Best Affirms the Ratings of ACE European Group Limited
April 30 2015 - 12:34PM
Business Wire
A.M. Best has affirmed the financial strength rating of
A++ (Superior) and the issuer credit rating of “aa+” of ACE
European Group Limited (AEGL) (United Kingdom). The outlook for
both ratings is stable.
The ratings reflect AEGL’s excellent stand-alone risk-adjusted
capitalisation, consistently strong operating performance and
excellent business profile. The ratings also reflect the support
provided to AEGL by its parent company, ACE Limited (ACE)
(Switzerland) [NYSE: ACE], and AEGL’s importance within the ACE
group. AEGL continues to be of strategic significance to its parent
company as its main underwriting operation in the United Kingdom
and Europe. In addition, the company receives significant
reinsurance support from ACE group affiliates.
AEGL’s excellent stand-alone risk-adjusted capitalisation
reflects the company’s strong operating performances in recent
years and has been achieved in spite of dividend payments. In 2014,
an interim dividend of GBP 50 million was paid (2013: GBP 75
million) but no final dividend was proposed.
AEGL achieved an excellent operating performance in 2014 with a
profit before tax, but after equalisation reserve movement, of GBP
251.9 million (2013: GBP 57.3 million). Net catastrophe losses were
relatively light at GBP 10.0 million (2013: GBP 3.8 million) and
the underwriting result was supported by a substantial prior year
reserve release. With market conditions continuing to be generally
difficult throughout 2014, AEGL reported a 3% reduction in its
gross written premiums to GBP 2.32 billion from GBP 2.39 billion in
2013. Assuming a normal level of catastrophes during 2015, AEGL is
expected to achieve a similar technical result in 2015 to that
reported in 2014, reflecting targeted business growth although
market conditions remain challenging.
AEGL has an excellent business profile in its core U.K. and
continental European markets, as an underwriter of a
well-diversified portfolio of property and casualty, accident and
health and specialty personal lines insurance.
A positive or negative rating action for AEGL could arise
following positive or negative action with respect to the ACE
group’s ratings, although this is considered unlikely in the near
term. Weaker than expected operating performance or a material
reduction in AEGL’s contribution to the group could exert negative
pressure on AEGL’s ratings.
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.
Key insurance criteria reports utilised:
- Catastrophe Analysis in A.M. Best
Ratings
- Rating Members of Insurance Groups
- Risk Management and the Rating Process
for Insurance Companies
- Understanding Universal BCAR.
In accordance with Regulation (EC) No. 1060/2009, the
following is a link to required disclosures: A.M. Best Europe -
Rating Services Limited Supplementary Disclosure.
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.
A.M. Best CompanyDavid Drummond, +(44) 20 7397
0327Senior Financial
Analystdavid.drummond@ambest.comorCatherine Thomas,
+(44) 20 7397 0281Director,
Analyticscatherine.thomas@ambest.comorChristopher Sharkey,
+(1) 908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +(1) 908
439 2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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