A.M. Best Affirms Ratings of Aspen Insurance Holdings Limited’s U.S. Subsidiaries
September 19 2013 - 9:23AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating
of A (Excellent) and issuer credit ratings of “a” of Aspen
Specialty Insurance Company (ASIC) (Bismarck, ND) and Aspen
American Insurance Company (AAIC) (Dallas, TX). Both companies
are wholly owned subsidiaries of their ultimate parent, Aspen
Insurance Holdings Limited (Aspen) (Bermuda) (NYSE:AHL). The
outlook for all ratings is stable.
These ratings are based upon ASIC and AAIC’s strategic
importance and roles in Aspen’s U.S. business platform. In
addition, the ratings also reflect the explicit support provided
via the substantial quota share reinsurance of ASIC and AAIC’s net
business through their Bermuda-based affiliate, Aspen Bermuda
Limited (ABL). Moreover, ABL also provides a guarantee for all
of ASIC and AAIC’s third-party reinsurance recoverables.
Additionally, ASIC’s balance sheet is further protected by an
adverse development cover for its outstanding loss reserves as of
December 31, 2008. The ratings also acknowledge the implied support
of future parental commitment.
Both ASIC and AAIC continue to maintain solid stand-alone
capitalization, which has been and continues to be enhanced by low
underwriting and investment leverage as well as capital
contributions from Aspen. While market competition continues to
pose a significant challenge to ASIC and AAIC as both companies
work to establish Aspen’s presence in the United States, pricing
pressures appear to be diminishing as the commercial lines
marketplace has been more receptive to rate increases recently.
Toward this end, management has made significant investments in new
underwriting teams and infrastructure. A.M. Best will continue to
closely monitor the operating performance of both companies, with
particular focus on execution and their ability to achieve business
projections.
Any future rating actions for ASIC and AAIC will likely be in
accordance with any future rating actions on ABL.
Factors that may lead to negative rating actions on both
companies could result from their continued sub-par operating
results, a material deterioration in their stand-alone
risk-adjusted capitalization and/or any lessening of support
(implied or explicit) provided by ABL.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
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 © 2013 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best Co.Kenneth Monahan, 908-439-2200,
ext. 5342Financial
Analystkenneth.monahan@ambest.comorJoseph Roethel,
908-439-2200, ext. 5630Assistant Vice
Presidentjoseph.roethel@ambest.comorRachelle Morrow,
908-439-2200, ext. 5378Senior Manager, Public
Relationsrachelle.morrow@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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