A.M. Best Upgrades Ratings of Aspen Insurance Limited
08 December 2007 - 6:26AM
Business Wire
A.M. Best Co. has upgraded the financial strength rating to A
(Excellent) from A- (Excellent) and the issuer credit rating (ICR)
to �a� from �a-� of Aspen Insurance Limited (AIL) (Bermuda). The
outlook for both ratings is stable. The rating upgrades reflect a
sustainable improvement in AIL�s stand alone risk-adjusted
capitalisation, which is likely to be supported by strong retained
earnings of above USD 150 million in both 2007 and 2008. In
addition, Aspen has continued to balance the spread of business
between its two main operating entities, AIL and its sister
company, Aspen Insurance UK Limited (AIUK), through the use of
intra-group quota share arrangements. This even distribution of
risk, AIL�s excellent risk-adjusted capitalisation and excellent
financial strength of the consolidated group has led A.M. Best to
harmonise the ratings of both entities. (For details on AIUK and
its ultimate parent, Aspen Insurance Holdings Ltd. (Aspen)
(Bermuda) [NYSE: AHL], please refer to A.M. Best�s press release
dated December 7, 2007.) A.M. Best believes that AIL is likely to
continue to produce excellent earnings in 2007, benefiting from
profitable underwriting, strong rate adequacy in the property
catastrophe market (despite weakening) and improved investment
returns. A stable combined ratio in the region of 80% is likely,
supported by another benign U.S. hurricane season. A.M. Best
believes AIL is likely to achieve strong, albeit somewhat weaker
performance in 2008 (subject to catastrophe experience), owing to
the softening rating environment across all AIL�s main lines of
business. In A.M. Best�s opinion, AIL benefits from the strength of
the Aspen brand with a significant proportion of its income
emanating from intra-group cessions. Overall, AIL has a well
diversified book of property and casualty reinsurance (in
particular, reinsurance of AIUK) and specialty insurance and
reinsurance business (including its significant structured risk
account). For Best�s Ratings, an overview of the rating process and
rating methodologies, please visit www.ambest.com/ratings. Founded
in 1899, A.M. Best Company is a global full-service credit rating
organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals
and health care system providers. For more information, visit
www.ambest.com.
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