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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 10, 2003 12:00 AM (EST)
A.M. Best Co. has raised the financial strength rating to A (Excellent) from A- (Excellent) of AXIS Specialty Limited (AXIS) (Bermuda) and its operating affiliates. The rating outlook is stable.
This action reflects the company's superior operating results in its first year of operation, which stem from the development of a strong broker distribution network along with the successful implementation of underwriting and risk management controls. Additionally, AXIS continues to maintain superior capitalization with almost $2 billion of shareholders' equity at year-end 2002, along with a highly experienced management team.
AXIS produced a combined ratio of 71% in 2002 while benefiting from higher market rates, light catastrophes and an unencumbered balance sheet. Cash flows from operations were also strong in 2002 and resulted in cash and invested assets increasing by almost $600 million. The company's investment portfolio remained conservative, primarily invested in high quality government and corporate fixed income securities.
AXIS was formed in late 2001 in response to the market dislocation in the global insurance and reinsurance markets following the tragic events of September 11 through a private placement equity offering led by Trident II, L.P., a private equity fund managed by MMC Capital, Inc. Since commencing operations, it has established a diversified book of business, both geographically and by line. Furthermore, AXIS has successfully adhered to its original business plan, which focuses on broker-sourced short-tail lines, principally specialty lines in property, marine, energy and aerospace along with property, catastrophe, aviation and marine reinsurance.
In 2002, AXIS expanded its operating platform through the formation of affiliated companies in Ireland and the United States. Each affiliate's capital is protected through both quota share and stop loss reinsurance agreements with AXIS.
Partially offsetting these strengths is potential market pressure on pricing, which could dampen expected returns and exposure to low frequency high severity property catastrophe losses. A.M. Best will continue to closely monitor AXIS' operations and performance.
The financial strength rating has been raised to A (Excellent) from A- (Excellent) of AXIS Specialty Limited (Bermuda) and its following affiliates:
- AXIS Specialty Insurance Company
- AXIS Reinsurance Company
- AXIS Specialty Europe Limited
- AXIS Re Ltd
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.