Ian Beaton
4 December 2023News

Group Ark Insurance maintains A rating

Bermuda-based Group Ark Insurance, which has been scaling up its operations, has had its financial strength rating of A with a stable outlook affirmed by AM Best. 

The ratings agency said the Bermuda-based property/casualty and specialty re/insurer, which is a subsidiary of Ark Insurance Holdings, has benefited from an injection of $605 million from White Mountains Insurance Group.

The group, which includes two Lloyd’s of London syndicates and is headed by CEO Ian Beaton, has increased its gross written premiums from $500 million in 2020 to $1.7 billion through the first nine months of 2023. 

AM Best said: “Ark is a property/casualty and specialty (re)insurance group, operating through an established Lloyd’s platform. 

“Since 2021, Ark has been scaling up its Lloyd’s platform and underwriting third-party insurance and reinsurance business from Bermuda through GAIL. The group’s scale-up is supported by $605 million of capital from White Mountains Insurance Group (WTM), injected on 1 January 2021, and the issuance of $164 million of subordinated debt in 2021.”

It said AM Best’s “adequate operating performance assessment” considered the group’s robust underwriting performance at Lloyd’s and execution of its scale-up business plan to date. 

“AM Best expects Ark to maintain good technical return metrics over the underwriting cycle, notwithstanding the execution risk associated with its continued scale-up” the agency said. “In 2022, Ark reported a consolidated combined ratio of 85.8%, as calculated by AM Best. While the company’s profitability remains exposed to potential volatility from catastrophe events, Ark’s recent underwriting performance has proven resilient to event losses. 

“In 2023, Ark reported a combined ratio for the first nine months of 86.5%, driven by selective underwriting across all lines of business, strengthening of premium rates and prior-year reserve releases.”

The agency said Ark’s neutral business profile assessment reflected its established profile at Lloyd’s, and its current and projected diversified underwriting portfolio. 

“The group’s gross written premium reached $1.5 billion in 2022, compared with $1.1 billion in 2021 and $596 million in 2020, indicating positive market acceptance of the scale-up. 

“In line with its business plan, Ark has achieved further growth over 2023, with gross written premium reaching $1.7 billion for the first nine months of the year. Ark benefits from experienced and stable management and underwriting teams, which partially mitigates the execution risk associated with the material scale-up of its operations.”

AM Best added: “The ratings reflect Ark’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). In addition, the ratings reflect GAIL’s strategic importance to Ark, as the group’s Bermuda-based (re)insurance vehicle. GAIL provides reinsurance to Ark’s corporate member at Lloyd’s and writes third-party (re)insurance business.

“Ark’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Ark’s risk-adjusted capitalisation is projected to remain at this level, supported by good internal capital generation. 

“The balance sheet strength assessment considers Ark’s prudent reserving, low risk investment portfolio, good financial flexibility and strong liquidity profile. A partially offsetting factor is the company’s material exposure to catastrophe risk, which AM Best expects to be managed through the appropriate use of reinsurance and robust exposure management.”





More on this story

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8 August 2023   The insurance group turns a profit despite loss in Media Alpha subsidiary.
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8 February 2023   The Bermuda group’s results were also enhanced by the sale of NSM.
article
9 May 2022   Ark, the White Mountains-owned Lloyd’s carrier, posted a pre-tax loss of $23m.

More on this story

News
8 August 2023   The insurance group turns a profit despite loss in Media Alpha subsidiary.
News
8 February 2023   The Bermuda group’s results were also enhanced by the sale of NSM.
article
9 May 2022   Ark, the White Mountains-owned Lloyd’s carrier, posted a pre-tax loss of $23m.