A.M. Best Removes From Under Review and Upgrades Ratings of Aspen Specialty Insurance Company
April 01 2009 - 3:47PM
Business Wire
A.M. Best Co. has removed from under review with
developing implications and upgraded the financial strength rating
(FSR) to A (Excellent) from A- (Excellent) and issuer credit rating
(ICR) to �a� from �a-� of Aspen Specialty Insurance Company
(ASIC) (Bismarck, ND), a wholly owned subsidiary of its ultimate
parent, Aspen Insurance Holdings Limited (AIHL) (NYSE: AHL)
(Hamilton, Bermuda). The outlook assigned to both ratings is
stable.
These rating actions reflect the implementation of reinsurance
support provided by ASIC�s Bermuda-based affiliate, Aspen
Insurance Limited (AIL) (Hamilton, Bermuda), which includes a
substantial quota share of all ASIC�s net business and a guarantee
of all third-party reinsurance recoverables. The quota share
reinsurance support for ASIC�s business, effective April 1, 2009,
represents substantial, additional explicit support for the company
by AIHL.
During the second half of 2008, AIHL management reached the
decision to revise ASIC�s business plan and re-affirm AIHL�s
commitment to writing the surplus lines business that ASIC had
voluntarily ceased writing as of January 1, 2008. Substantially all
new and renewal excess and surplus lines business that had been
written by ASIC in prior years was written, as of that date, by
another foreign affiliate, Aspen Insurance UK Limited (AIUK)
(United Kingdom). This business will now, again, be written by
ASIC.
Both of AIHL�s non-U.S. operating companies currently maintain
FSRs of A (Excellent) and ICRs of �a�. The ratings of ASIC also
reflect its strong stand-alone capitalization, driven by its low
underwriting leverage and negligible investment leverage.
These positive rating factors are partially offset by the weaker
than expected results reported by ASIC during its initial period of
operation, as evidenced by the company�s inability to produce
calendar year results in line with those detailed in the business
plan shared with A.M. Best. Furthermore, the current competitive
market also presents a significant challenge.
For Best�s Credit Ratings, an overview of the rating process and
rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings,
including any additional methodologies and factors, which may have
been considered, can be found at
www.ambest.com/ratings/methodology.
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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