A.M. Best Revises Issuer Credit Rating Outlook to Positive for Aspen Insurance Holdings Limited and Its Subsidiaries
19 November 2015 - 3:44AM
Business Wire
A.M. Best has revised the outlook for the issuer credit
ratings (ICR) to positive from stable and affirmed the financial
strength rating (FSR) of A (Excellent) and the ICRs of “a” of
Aspen Insurance UK Limited (AIUK) (United Kingdom), Aspen
Bermuda Limited (ABL) (Bermuda), Aspen American Insurance
Company (AAIC) (Dallas, TX) and Aspen Specialty Insurance
Company (ASIC) (Bismarck, ND). The outlook for the FSR remains
stable. At the same time, A.M. Best has affirmed the ICR of “bbb”
and the issue ratings of Aspen Insurance Holdings Limited
(Aspen) (Bermuda) (NYSE: AHL), the non-operating holding company of
the Aspen group of companies. The outlook for the ICR and the issue
ratings has been revised to positive from stable. (Please see below
for a detailed listing of the issue ratings.)
The ratings reflect A.M. Best’s expectation that Aspen’s
consolidated risk-adjusted capitalisation will remain at an
excellent level, in spite of a continuing programme of share
repurchases. Projected growth in premium volumes, which is mainly
targeted within the U.S. insurance market, is expected to be
supported by internal capital generation. Additionally, the four
subsidiary companies are expected to maintain strong stand-alone
risk-adjusted capitalisation. AIUK continues to be the main
earnings contributor of the Aspen group, whilst ABL remains
important to Aspen’s capital management strategy, as it provides
internal reinsurance to the other Aspen group companies and access
to third-party business written in Bermuda. Aspen’s U.S. companies,
AAIC and ASIC, provide business diversification for the group and
benefit from extensive reinsurance support from ABL.
The revision of the ICR outlook to positive from stable reflects
this continuing financial strength, the group’s recent record of
excellent operating performance and its increasingly strong
business profile. Over the past five years (2010-2014), Aspen has
compiled a record of generally strong operating performances,
despite the losses from the unprecedented series of natural
catastrophes in 2011. For the last two full years, and for the
first three quarters of 2015, underwriting performance has been
excellent, with combined ratios below 93%. Aspen’s operating
performance for 2015 is expected to remain at an excellent level,
assuming normal catastrophe activity for the remainder of the year.
A pre-tax profit of USD 214 million was reported in the first three
quarters of 2015, a reduction from USD 300 million at the same
point in 2014, reflecting in part an increase in attritional
losses, including USD 30 million from the Tianjin explosion, and
significant investment and currency exchange losses.
The performance of Aspen’s U.S.-domiciled subsidiaries has been
a negative rating factor in the past, largely as a result of the
subsidiaries’ high start-up costs relative to net earned premiums.
However, the technical results of these subsidiaries have improved
despite challenging market conditions. These companies are now
making a positive contribution to the group’s profits. A.M. Best
will continue to monitor the performance of these subsidiaries.
Aspen has an increasingly strong business profile in its core
markets, supported by its diversified portfolio of
property/casualty and specialty insurance and reinsurance business.
Diversification has improved significantly in recent years through
growth in insurance lines and increased geographical spread.
Aspen’s access to business is enhanced by its U.S. subsidiaries and
network of branches in Europe, Canada, Singapore and Australia.
The following issue ratings have been affirmed:
Aspen Insurance Holdings
Limited—
-- “bbb” on USD 300 million 4.65% senior unsecured notes, due 2023
-- “bbb” on USD 250 million 6% senior unsecured notes, due 2020 --
“bb+” on USD 200 million 7.401% perpetual non-cumulative preference
shares (currently USD 133 million outstanding) -- “bb+” on USD 275
million 5.95% perpetual non-cumulative preference shares -- “bb+”
on USD 160 million 7.25% perpetual non-cumulative preference shares
The following indicative ratings under the universal shelf
registration have been affirmed:
Aspen Insurance Holdings
Limited—
-- “bbb” on senior unsecured debt -- “bbb-” on senior subordinated
debt -- “bb+” on junior subordinated debt -- “bb+” on preferred
stock
In accordance with Regulation (EC) No. 1060/2009, the
following is a link to required disclosures: A.M. Best Europe -
Rating Services Limited Supplementary Disclosure.
This press release relates to rating(s) that have been
published on A.M. 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 visit A.M.
Best’s Ratings & Criteria Center.
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 © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20151118006283/en/
A.M. Best CompanyDavid Drummond, +(44) 20 7397
0327Senior Financial
Analystdavid.drummond@ambest.comorSusan Molineux, +(1) 908
439 2200, ext. 5829Senior Financial
Analystsusan.molineux@ambest.comorChristopher Sharkey, +(1)
908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +(1) 908
439 2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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