Press Release - OCTOBER 11, 2018

A.M. Best Removes From Under Review, Affirms Credit Ratings of Validus Holdings and Subs.; Withdraws Ratings of Validus Holdings

 Mariza Costa
Senior Financial Analyst
+1 908 439 2200, ext. 5154

Robert DeRose
Senior Director
+1 908 439 2200, ext. 5453

Christopher Sharkey
Manager, Public Relations
(908) 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
(908) 439 2200, ext. 5644


A.M. Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of Validus Reinsurance, Ltd. (Validus Re) (Hamilton, Bermuda) and its affiliate, Validus Reinsurance (Switzerland) Ltd. (Zurich, Switzerland). Additionally, A.M. Best has removed from under review with developing implications and affirmed the Long-Term ICR of “bbb”, as well as the existing Long-Term Issue Credit Rating (Long-Term IR) of Validus Holdings, Ltd. (Validus) (Hamilton, Bermuda), the ultimate parent company. The outlook assigned to these Credit Ratings (ratings) is stable. (See below for a detailed listing of the Long-Term IR.) Concurrently, A.M. Best has withdrawn the ratings of Validus Holdings at the company’s request to no longer participate in A.M. Best’s interactive rating process.

These rating actions follow the close of American International Group, Inc.’s (AIG) [NYSE: AIG] acquisition of Validus and its subsidiaries in July 2018.

The ratings reflect Validus Re’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Validus Re’s balance sheet strength is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as a high quality and liquid investment portfolio of high quality assets. Furthermore, Validus Re has a history of conservative reserving. The group’s strongest level of capitalization allows it to absorb the catastrophe losses inherent in its businesses. Validus Re’s operating performance has been consistently strong on average, driven by solid underwriting profits and stable investment returns. The company’s underwriting performance is supported by solid premium growth but has exhibited volatility given the recent catastrophe events. The group maintains a well-diversified business profile, focusing on reinsurance and asset management and should benefit from being part of the larger AIG enterprise and global business platform. Validus Re has developed, implemented and embedded a risk management framework that appropriately addresses the risks inherent in its profile, and its risk management capabilities generally meet or exceed its risk profile.

The following Long-Term IR has been removed from under review with developing implications and affirmed, with an assigned outlook of stable. Concurrently, A.M. Best has withdrawn the Long-Term IR at the company’s request:

Validus Holdings, Ltd.—

— “bbb” on $250 million 8.875% senior unsecured notes, due January 2040

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.

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