AM Best affirms BF&M ratings
Markel maintains ratings
Rating agency AM Best reaffirmed its financial strength rating of A- (Excellent) and the long-term issuer credit rating (ICR) of “a-” (Excellent) for Watford Re in Bermuda and its subsidiaries in Guernsey and New Jersey.
The business’s rating is no longer under review with negative implications, according to AM Best.
The ratings reflect Watford’s balance sheet strength (assessed as “very strong”), it said, as well as its adequate operating performance, a neutral business profile and appropriate enterprise risk management.
The company’s risk-adjusted capitalization at the end of 2020 was the strongest level under AM Best’s Credit Adequacy Ratio (BCAR).
It continued: “Watford’s BCAR score has been subject to significant recent volatility due to the balance sheet’s exposure to non-investment grade assets and the resulting mark-to-market volatility associated with this exposure. Moving forward, the company is expected to continue de-risking its investment portfolio, leading to more stability in its capitalization. The group’s five-year average operating returns have been volatile, and the company has experienced significant fluctuations in realized and unrealized gains and losses. However, Watford has been profitable in four of the past five years.”
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