Validus Re’s strong risk-adjusted capitalisation, solid historical operating performance and experienced management team has led AM Best to affirm a financial strength rating of A and issuer credit rating of “a”.
According to AM Best, Validus Re’s strength lies in an excellent enterprise risk management program and prudent operating strategies. The ratings agency writes: “the company’s consistent positive operating results demonstrate the capability of providing results that are at the high end of its peer group. Validus Re has the expertise and capacity to write diverse books of business globally.”
The strong ratings are offset by exposure to high severity events and fierce competition in the property cat reinsurance sector; however, Validus Re’s capital has been through stringent stress tests, mitigating concern.
AM Best says: “Validus Re has enhanced the business profile of [Validus Group] by diversifying its revenues to include other lines of business, which has increased its client base and scale.”
The stable outlook reflects AM Best’s expectation that the group will continue to produce favorable long-term operating results. A large loss or unfavorable operating profitability trends could put Validus Re’s ratings on shaky ground.