Published: February 01, 2011
A.M. Best Revises Outlook to Positive for Arch Capital Group Ltd and Its Subsidiaries
OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has revised the outlook to positive from stable and
affirmed the financial strength rating (FSR) of A (Excellent) and issuer
credit ratings (ICR) of "a+" of Arch Reinsurance Ltd. (Arch)
(Bermuda) and its strategic affiliates. A.M. Best also has revised the
outlook to positive from stable and affirmed the ICRs of "bbb" and
"bbb+" of Arch Capital Group (US) Inc. (New York, NY) and the
ultimate holding company, Arch Capital Group Ltd (Bermuda)
[NASDAQ: ACGL], respectively, as well as all debt ratings of Arch
Capital Group Ltd. (See below for a detailed listing of the companies
and ratings.)
The revised outlook reflects Arch's continued superior operating
performance, consistently excellent capitalization and demonstrated risk
management prowess. Arch maintains a very strong underwriting culture,
which centers on active cycle management and being adaptive to varied
market conditions.
Overall operating results since Arch's inception have been strong and in
certain instances have exceeded most peers in the sector. Typically,
Arch has had a smaller share of major industry losses, which
demonstrates the superior risk management of the company. Furthermore,
Arch has a prudent investment portfolio and conservative reserving
philosophy, which helps maintain a strong balance sheet. Products are
offered on a worldwide basis in both primary and reinsurance markets for
property/casualty lines of business.
Partially offsetting these positive rating attributes are the current
soft market conditions in which Arch, as well as all industry
participants, must navigate.
The FSR of A (Excellent) and ICRs of "a+" have been affirmed for Arch
Reinsurance Ltd. and its following affiliates:
-
Arch Reinsurance Company
-
Arch Insurance Company
-
Arch Specialty Insurance Company
-
Arch Excess & Surplus Insurance Company
-
Arch Insurance Company (Europe) Ltd
The following debt ratings have been affirmed:
Arch Capital Group Ltd-
-- "bbb+" on $300 million 7.35% senior unsecured notes, due 2034
-- "bbb-" on $200 million 8% non-cumulative preferred shares, Series A
-- "bbb-" on $125 million 7.875% non-cumulative preferred shares, Series
B
The following indicative ratings have been affirmed for debt securities
available under the existing shelf registration:
Arch Capital Group Ltd-
-- "bbb+" on senior debt
-- "bbb" on subordinated debt
-- "bbb-" on preferred stock
Arch Capital Group (U.S.) Inc. (guaranteed by Arch Capital Group
Ltd)-
-- "bbb+" on senior debt
-- "bbb" on subordinated debt
-- "bbb-" on preferred stock
The principal methodology used in determining these ratings is Best's
Credit Rating Methodology -- Global Life and Non-Life Insurance Edition,
which provides a comprehensive explanation of A.M. Best's rating process
and highlights the different rating criteria employed. Additional key
criteria utilized include: "Risk Management and the Rating Process for
Insurance Companies" ; "Understanding BCAR for Property/Casualty
Insurers" ; "Understanding Universal BCAR" ; "Natural Catastrophe Stress
Test Methodology" ; "Rating
Members of Insurance Groups" ; and "A.M.
Best's Ratings & the Treatment of Debt." Methodologies can be
found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright (c) 2011 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
A.M. Best Co.
Greg Reisner
Senior Financial
Analyst
908-439-2200, ext. 5224
greg.reisner@ambest.com
or
John
Andre
Group Vice President
908-439-2200, ext.
5619
john.andre@ambest.com
or
Rachelle
Morrow
Senior Manager, Public Relations
908-439-2200,
ext. 5378
rachelle.morrow@ambest.com
or
Jim
Peavy
Assistant Vice President, Public Relations
908-439-2200,
ext. 5644
james.peavy@ambest.com
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