Chubb’s Bermuda subsidiaries have ratings affirmed
Chubb’s Bermuda subsidiaries have had their A++ financial strength ratings affirmed with a stable outlook, citing their balance sheets, which AM Best rated as strongest.
AM Best made the affirmation as it affirmed Chubb’s Zurich based parent company’s A++ rating and assigned ratings to Chubb’s other subsidiaries.
Assessing Chubb’s US subsidiary, AM Best said: “A robust pricing environment in recent years for the majority of its commercial business lines globally has been particularly supportive of especially strong underwriting performance through 2023, not just for Chubb US Group, but for nearly all of its major operating units.
“However, sharply elevated inflationary trends affecting both property and casualty lines may constrain prospective underwriting performance.”
AM Best said: “The ratings of Chubb Tempest Re and its member reflect their balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, favourable business profile and appropriate ERM.
“Chubb Tempest Re principally provides property catastrophe reinsurance to commercial and personal property insurers. Property catastrophe reinsurance is written on an occurrence or aggregate basis and protects a ceding company against an accumulation of losses covered by its issued insurance policies, arising from a common event or occurrence.
“In addition to its external client business, Chubb Tempest Re acts as the internal global reinsurance hub for Chubb’s global operations, providing it with capital and risk management efficiencies resulting from the group’s global spread of risk.”
It said of Chubb Bermuda: “The ratings of Chubb Bermuda and its member reflect their balance sheet strength, which AM Best assesses as strongest, as well as their very strong operating performance, neutral business profile and appropriate ERM.
“The ratings of Chubb Bermuda also reflect the implicit support received from Chubb Limited, the ultimate parent.
“Chubb Bermuda provides commercial insurance products on an excess basis including excess liability, directors and officers, professional liability, property and political risk, with the latter being written by Sovereign Risk Insurance Ltd., a wholly owned managing agent. Chubb Bermuda focuses on Fortune 1000 companies and targets risks that are generally low in frequency and high in severity.”
On Chubb US, AM Best said: “Chubb US Group’s very strong operating performance is reflected by return measures that have outperformed those of the AM Best commercial casualty composite materially over the past five years.
“The Chubb US Group has consistently generated strong underwriting performance, operating income and net income, despite the impact of unusually high catastrophe losses since 2021, as well as the impact of pandemic-related losses in 2020.”
It added: “AM Best notes that Chubb US Group’s risk-adjusted capitalization strength, as measured by Best’s Capital Adequacy Ratio (BCAR) as of 3Q 2023, is still consistent with a strongest level capital adequacy assessment but has declined somewhat over the past 24 months.
“This was in large part a result of dividends paid to the parent company to fund share repurchases and the completion in July 2022 of the $5.4 billion acquisition of Cigna’s Asia-Pacific life and accident & health (A&H) businesses, as well as additional Huatai shares acquired.
“However, AM Best expects that capital retention by Chubb US Group will increase through the end of 2023 and into 2024, in part through a reduced level of share repurchases at the parent, enabling the group’s risk-adjusted capitalization levels to continue to return to historically higher levels.”
