CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - AUGUST 05, 2008 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a+" of AXIS Specialty Limited (AXIS) and its operating affiliates. Concurrently, A.M. Best has affirmed the ICR of "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 companies and ratings.)
The ratings of AXIS reflect its continued strong operating performance, excellent risk-based capitalization, solid risk management controls and its highly experienced management team. AXIS' operating strategy is to maintain a diversified book of business, both geographically and by line of business, with a focus 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. The company also has selectively expanded into professional lines and umbrella and excess liability coverages.
AXIS' overall operating performance has been consistently strong with a six-year average combined ratio of 80.5% and a six-year average return on equity of 17.9%, both of which place the company among the leaders in its Bermuda peer group. AXIS' excellent performance is directly attributable to its well established risk management controls and systems. Furthermore, AXIS continues to maintain a very strong level of risk-based capitalization under A.M. Best's stress scenarios. A.M. Best expects AXIS to continue managing its capital base in a very conservative manner within acceptable ranges to support its current ratings.
AXIS' positive attributes are partially offset by the current soft pricing environment and the challenges this market brings to the insurance/reinsurance industry. However, this factor is greatly offset by AXIS' strong presence in both primary and reinsurance markets, multiple product lines and worldwide distribution system.
The FSR of A (Excellent) and ICRs of "a+" have been affirmed 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 of "bbb+" has been affirmed for AXIS Capital Holdings Limited.
The following debt ratings have been affirmed:
AXIS Capital Holdings Limited—
- "bbb+" on $500 million 5.75% senior unsecured notes, due 2014
- "bbb-" on $250 million 7.25% non-cumulative preferred shares, Series A
- "bbb-" on $250 million 7.50% non-cumulative preferred shares, Series B
The following indicative ratings have been affirmed under the current shelf registration:
AXIS Capital Holdings Limited—
- "bbb+" on senior unsecured debt
- "bbb" on subordinated debt
- "bbb-" on preferred stock
AXIS Capital Trust I, II & III (guaranteed by AXIS Capital Holdings Limited)—
- "bbb-" on preferred securities
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.