AM Best affirms MS Amlin ratings

11-05-2018

AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a+” of MS Amlin AG, which writes third-party reinsurance business through its operations in Bermuda and Zurich, and acts as an internal reinsurer for the MS Amlin group.

According to the ratings agency the ratings reflect the company’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The outlook of these ratings remains stable. An additional factor is the rating enhancement based on the support of its ultimate parent, MS&AD Insurance Group Holdings, (MS&AD).

AM Best has also announced that the ratings of Lloyd’s Syndicate 2001 (United Kingdom) remain unchanged. The syndicate is managed by MS Amlin Underwriting and its ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all syndicates.

MS Amlin AG is a wholly-owned subsidiary of MS Amlin, the ultimate parent company of which is MS&AD. MS&AD’s Bermuda reinsurance entity, MS Frontier Reinsurance, was merged into MS Amlin AG effective 31 December 2016. MS Amlin AG’s ratings consider the company’s strategic importance to the MS&AD group as its principal international reinsurer.

The company’s balance sheet strength assessment is underpinned by the strongest level risk-adjusted capitalisation, based on Best’s capital adequacy ratio as at year-end 2017. AM Best expects risk-adjusted capitalisation to be maintained at the strongest level over the medium term.

MS Amlin AG’s operating performance is subject to volatility due to its exposure to natural catastrophe events. In 2017, the company recorded a combined ratio of 130 percent, up from the 2016 figure of 96 percent, driven by above average catastrophe losses, higher-than-expected level of attritional losses and adverse loss reserve development.

AM Best said that following recent underperformance, the reinsurer has undertaken a number of remedial actions to improve its technical profitability and to strengthen its underwriting and reserving practices. AM Best expects core underwriting performance to improve as a result of these actions over the medium term.

AM Best, MS Amlin, rating, strength, affirmation

Bermuda Re