AM Best affirms Endurance’s FSR following Montpelier Re acquisition


AM Best has affirmed the financial strength rating (FSR) of A (Excellent) Endurance Specialty Insurance (Endurance) (Bermuda) and its subsidiaries.

The rating reflects Endurance’s strong level of risk-adjusted capitalisation, specialty-focused diversified business profile, improved financial and operational leverage, reduced catastrophe exposure, and geographic diversification following the acquisition of Montpelier Re Holdings (Montpelier Re), according to the rating firm.

It also said the rating reflects Endurance’s solid operating performance, experienced management team and its strong enterprise risk management (ERM) programme.

Also considered in the rating, according to AM Best, is the successful integration of Montpelier Re, which it said has enhanced Endurance’s business profile, distribution channel capabilities, including access to an established Lloyd’s franchise and the alternative capital platform Blue Capital, which provides collateralised reinsurance and manages third-party capital.

“This acquisition increased Endurance’s market presence, which strengthens the company’s position in the global marketplace and may be a mitigating factor as the company operates in the current competitive market cycle, as rates remain soft, capacity is plentiful and investment yields are low,” said AM Best.

Endurance’s operating performance has significantly improved over the past three years as the company continues to adhere to its strict underwriting guidelines, reduce its catastrophe exposure, as well as reduce its underwriting and operational leverage. AM Best expects the company to continue this trajectory to enhanced profitability as the benefits from the synergies created from the Montpelier Re acquisition.

Endurance has built a solid ERM framework that consists of strong internal controls, enhanced by strong analytics. The company’s ERM structure has evolved and allows the entire organization to absorb significant losses. Management views its ERM programme as critical to sustaining profitability and reducing volatility.

Am Best, Endurance, Insurance, Ratings, Bermuda

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