AM Best affirms ‘excellent’ FSR of Aspen Bermuda after group acquisition

15-11-2016

AM Best has affirmed the financial strength rating (FSR) of A (Excellent) for Aspen Bermuda Limited (ABL), Aspen Insurance UK Limited (AIUK), Aspen American Insurance Company (AAIC), and Aspen Specialty Insurance Company (ASIC).

ABL provides internal reinsurance to the other Aspen group companies and access to third-party business written in Bermuda.

The ratings move comes after Aspen Insurance, the insurance segment of Aspen Insurance Holdings, acquired Blue Waters Insurers, a specialist marine managing general agency (MGA), based in San Juan, Puerto Rico.

Aspen Insurance Holdings is the non-operating holding company of the Aspen group.

The outlook of the FSR remains stable; the ratings reflect AM 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.

AM Best expects projected growth in premium volumes, which is mainly targeted within the US 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 US companies, AAIC and ASIC, provide business diversification for the group and benefit from extensive reinsurance support from ABL,” AM Best said.

According to the rating agency, 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 percent.

However, in the first three quarters of 2016, losses from weather-related events in the US 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, according to AM Best.

“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,” AM Best concluded.

AM Best, Aspen Bermuda, Bermuda, Insurance, Ratings, M&A, North America, EMEA, Catastrophe,

Bermuda Re