AM Best downgrades AXIS Capital

AM Best has downgraded AXIS Capital’s financial strength rating to A, from A+, citing operating performance that was inconsistent with expectations.

AM Best said: “While AXIS still maintains positive overall results and has taken corrective measures, particularly in its insurance segment, to improve its earnings profile, AM Best believes that the group’s operating performance is no longer in line with companies with a strong operating performance assessment or its own historical results.”

AM Best highlighted AXIS’ five-year average return-on-equity and combined ratios as falling short of its strong operating performance benchmarks.

In a statement issued in response to the move, AXIS admitted it had not been satisfied with its own operating performance. However, it argued the ratings action failed to take into account actions it has taken in recent years to strengthen its business, improve its portfolio and reduce volatility.

AXIS has also integrated Novae into its business, growing market relevance and solidifying leadership positions across most of its key lines, it said. “Even as we’ve taken these actions to strengthen our business, our primary focus has been to deliver the same high level of underwriting support and claims service that our clients and partners in distribution have come to expect from AXIS,” it added.

AXIS said it was committed to doing all it can to earn back its A+ rating.