CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JULY 24, 2007 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and upgraded the issuer credit ratings (ICR) to "a+" from "a" of AXIS Specialty Limited (AXIS) and its operating affiliates. Concurrently, A.M. Best has upgraded the ICR to "bbb+" from "bbb" and all existing debt ratings of AXIS Capital Holdings Limited (both of Hamilton, Bermuda) [NYSE: AXS]. The outlook for all ratings is stable. (See below for a detailed list of the ratings.)
The ratings of AXIS reflect its excellent risk-based capitalization, continued strong operating performance, robust risk management controls and its highly experienced management team. AXIS continues to maintain a diversified book of business, both geographically and by line of business, which focuses on broker sourced short- and medium-tail lines, principally specialty insurance lines including property, marine, aerospace and political risk, along with property catastrophe reinsurance coverage and other specialty reinsurance coverages. Since its inception, the company has selectively expanded into professional lines and umbrella and excess liability coverages. Professional lines and casualty lines now account for approximately 40% of AXIS' gross premium writings.
AXIS' overall operating performance has been consistently excellent since its inception with a five year average combined ratio and returns on equity that place it among the leaders within its peer group. AXIS' worldwide distribution and strong market presence position it well to opportunistically manage through the various phases of the underwriting cycle. These attributes are enhanced by the active risk management controls established by management since AXIS' formation and with emphasis on transparency throughout the organization.
AXIS' solid operating performance is somewhat tempered by its relatively short operating history. Due to the long-tail nature of its casualty business, the consistency and sustainability of this segment's operating performance has yet to be proven. It is noted however, that a significant portion of this long-tail business is related to professional lines, which are primarily written on a claims made basis.
A.M. Best expects AXIS to continue managing its capital base very conservatively within acceptable ranges to support its current ratings.
The FSR of A (Excellent) has been affirmed and the ICRs upgraded to "a+" from "a" for AXIS Specialty Limited and its following operating affiliates:
- AXIS Re Limited
- AXIS Reinsurance Company
- AXIS Specialty Europe Limited
- AXIS Specialty Insurance Company
- AXIS Surplus Insurance Company
- AXIS Insurance Company
The ICR has been upgraded to "bbb+" from "bbb" for AXIS Capital Holdings Limited.
The following debt ratings have been upgraded:
AXIS Capital Holdings Limited-
- to "bbb+" from "bbb" on $500 million 5.75% senior unsecured notes, due 2014
- to "bbb-" from "bb+" on $250 million 7.25% non-cumulative preferred shares, Series A
- to "bbb-" from "bb+" on $250 million 7.50% non-cumulative preferred shares, Series B
The following indicative ratings have been upgraded under the current shelf registration:
AXIS Capital Holdings Limited-
- to "bbb+" from "bbb" on senior unsecured debt
- to "bbb" from "bbb-" on subordinated debt
- to "bbb-" from "bb+" on preferred stock
AXIS Capital Trust I, II & III (guaranteed by AXIS Capital Holdings Limited)—
- to "bbb-" from "bb+" on preferred securities
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors.