AM Best affirms FSR of Everest’s subsidiaries
AM Best has affirmed the financial strength rating (FSR) of A+ (‘superior’) of the operating subsidiaries of Everest Re Group (Bermuda).
This reflects Everest’s balance sheet strength, which AM Best assesses as strongest, as well as its “adequate” operating performance, “very favourable” business profile and “appropriate” enterprise risk management for the group’s risk profile.
AM Best’s assessment of Everest’s balance sheet strength as strongest is attributed to the group’s levels of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio. Also reflected in the group’s balance sheet strength assessment is Everest’s high quality of capital and a retrocession programme that helps limit downside risk, the agency said.
“The group maintains a very favourable business profile as a leading non-life reinsurer, ranking No. 7 in the most-recent version of AM Best’s Top 15 Global Non-Life Reinsurance Groups,” the agency said.
“Everest also provides additional market capacity through its Mt. Logan Re platform, and Kilimanjaro Re catastrophe bonds. Despite its historical property-catastrophe focus, Everest has grown in other lines of business and has continued to build out its primary insurance segment footprint. AM Best believes that Everest’s very favourable business profile has helped the group generate profitable business under very competitive conditions.”
Everest has produced operating performance metrics that consistently outperform its peer group, the agency said, despite exposure to shock loss events as it continues to shift to a lower volatility risk profile. AM Best believes Everest’s performance is partially attributable to its “well-established” risk management infrastructure, which is embedded across the organisation. Everest also benefits from a relatively low expense ratio that allows the group to absorb “more readily” significant losses compared with many of its peers. Everest’s insurance segment has provided “meaningful” earnings diversification, it added.
Positive rating movement is “unlikely” in the near term, while rating factors that could lead to negative rating actions include deteriorating trends in operating profitability or outsized catastrophe or investment losses relative to peers and/or AM Best expectations.
