AM Best affirms AXIS' A rating
Ratings agency AM Best has affirmed Bermuda-based AXIS Capital's 'A' financial strength rating after it strengthened reserves on its casualty book last year.
The specialty re/insurer strengthened reserves on its casualty book after having evaluated and reviewed claims for accident years 2017 to 2022, AM Best said.
"Claims experiences for these years were impacted by unanticipated higher social and economic inflation," the agency said. "However, prior to 2023, AXIS had reported favourable reserve development for about nine of the past 10 years, testament to the company’s reserving controls efficiency."
AM Best also said it assessed AXIS' operating performance as adequate, citing the volatility of its underwriting results over the recent five-year period, but added: "However, corrective measures implemented over the past two years to mitigate volatility such as exiting the property-catastrophe reinsurance business has resulted in more-stable earnings. These changes have favourably impacted profitably measures with the group’s loss and combined ratios improving significantly."
AM Best said the ratings reflected AXIS’ balance sheet strength, which it assessed as strongest, as well as its favourable business profile and appropriate enterprise risk management (ERM) from the group’s risk profile.
It said AXIS, led by chief executive officer Vincent Tizzio, maintained the strongest levels of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which placed its balance sheet strength in the strongest category.
"The group’s balance sheet strength assessment is supported by financial flexibility at the holding company level and within the operating subsidiaries, while also reflecting capital management strategies that have included consistent common and preferred dividends, as well as share repurchases, the agency said.
"AM Best assesses AXIS’ business profile as favourable, with the group consistently ranking in AM Best’s Global Reinsurance 50 largest reinsurance enterprises, and in AM Best’s excess and surplus ranking.
"Despite some recent changes to its business mix, the group still retains a well-diversified profile as a specialty underwriter of complex risks with a significant presence in the Lloyd’s market. The group’s ERM is sophisticated and embedded throughout the organization. AM Best believes that AXIS’ risk management is appropriate given its complex risk profile."
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