AM Best Affirms Credit Ratings of Arch Capital Group Ltd. and Its Subsidiaries
11 December 2021 - 08:51AM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term
ICR) of “aa-” (Superior) of Arch Reinsurance Ltd. (Arch) (Bermuda)
and its strategic affiliates. Concurrently, AM Best has affirmed
the Long-Term ICRs of “a-” (Excellent) and the Long-Term Issue
Credit Ratings (Long-Term IRs) of Arch Capital Group Ltd. (Arch
Capital) (Bermuda) [NASDAQ: ACGL], the ultimate holding company;
Arch Capital Group (US) Inc (Delaware); and Arch Capital Finance
LLC (Delaware). (See below for a detailed listing of the companies
and ratings.) The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect the group’s balance sheet strength, which AM
Best assesses as strongest, as well as its strong operating
performance, favorable business profile and appropriate enterprise
risk management (ERM).
The ratings are based on Arch’s historically strong operating
performance, as well as its balance sheet strength, as measured by
Best’s Capital Adequacy Ratio (BCAR), and strong management team.
In 2020, Arch continued to perform favorably on most operating
metrics despite the impact of COVID-19. Arch also has maintained a
strong risk-adjusted capital position, which contemplates a
significant Stressed Ultimate Loss, as calculated according to AM
Best’s “Evaluating Mortgage Insurance” criteria procedure. AM Best
utilized a conservative stress scenario for Arch’s mortgage
insurance book of business when calculating stress-tested
risk-adjusted capitalization. AM Best also recognizes that the
mortgage insurance business relies heavily on financial models that
can vary from actual results.
The stable outlooks reflect AM Best’s expectations that the
group’s strongest level of balance sheet strength will continue to
be supported by strong and stable operating performance, favorable
reserve development, diverse business profile and well-defined ERM
program.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-”
(Superior) have been affirmed with stable outlooks for Arch
Reinsurance Ltd. and its following affiliates:
- Arch Reinsurance Company
- Arch Insurance Company
- Arch Specialty Insurance Company
- Arch Property Casualty Insurance Company
- Arch Indemnity Insurance Company
- Arch Insurance Canada Ltd.
- Alwyn Insurance Company Limited
- Arch Insurance (UK) Limited
The following Long-Term IRs have been affirmed with stable
outlooks:
Arch Capital Group Ltd.— -- “a-” (Good) on $300 million 7.35%
senior unsecured notes, due 2034 -- “bbb” (Good) on $450 million
5.25% non-cumulative preferred shares, Series E -- “bbb” (Good) on
$330 million 5.45% non-cumulative preferred shares, Series F
Arch Capital Group (US) Inc (guaranteed by Arch Capital Group
Ltd.)— -- “a-” (Excellent) on $500 million 5.144% senior unsecured
notes, due 2043
Arch Capital Finance LLC (guaranteed by Arch Capital Group
Ltd.)— -- “a-” (Excellent) on $500 million 4.011% senior unsecured
notes, due 2026 -- “a-” (Excellent) on $450 million 5.031% senior
unsecured notes, due 2046
The following indicative Long-Term IRs under the existing shelf
registration have been affirmed with stable outlooks:
Arch Capital Group Ltd.— -- “a-” (Excellent) on senior unsecured
debt -- “bbb+” (Good) on subordinated debt -- “bbb” (Good) on
preferred stock
Arch Capital Group (US) Inc (guaranteed by Arch Capital Group
Ltd.)— -- “a-” (Excellent) on senior unsecured debt -- “bbb+”
(Good) on subordinated debt -- “bbb” (Good) on preferred stock
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best's
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Preliminary Credit Assessments and AM Best press
releases, please view Guide to Proper Use of Best’s Ratings &
Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Clare Finnegan Senior Financial Analyst +1 908
439 2200, ext. 5165 clare.finnegan@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Steven Chirico, CPA Director +1 908 439 2200,
ext. 5087 steven.chirico@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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