Best’s News & Research Service - November 09, 2022 09:32 AM (EST)
AM Best Affirms Credit Ratings of XL Bermuda Ltd and Its Subsidiaries
- November 09, 2022 09:32 AM (EST)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) of XL Bermuda Ltd (AXA XL) (Bermuda) and its subsidiaries. (Please see below for detailed listing). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect AXA XL’s balance sheet strength, which AM Best assesses as adequate, its adequate operating performance, favorable business profile and very strong enterprise risk management (ERM), as well as the benefit of significant implicit and explicit support provided by its ultimate parent, AXA S.A
AXA XL’s overall balance sheet strength assessment of adequate recognizes recent deterioration in its capital levels, as measured by Best’s Capital Adequacy Ratio (BCAR), largely stemming from unrealized losses in AXA XL’s investment portfolio. AM Best notes that AXA XL nevertheless benefits from significant financial flexibility provided by AXA S.A., and that on a stand-alone basis, AXA XL continues to maintain ample liquidity and a solid regulatory capital position.
Operating performance has steadily improved following elevated COVID losses experienced in 2020. The group’s underwriting performance has benefitted from an improving rate environment and prudent risk selection. AXA XL has also reduced its exposure to natural catastrophe risk in recent years, which has lowered underwriting volatility and should lead to stable performance going forward.
AXA XL’s very strong ERM assessment reflects its increasing integration into the greater AXA organization’s ERM practices and operating procedures. While the group’s stand-alone capitalization has displayed recent volatility, its solvency capital continues to fall within the AXA capital management policy and has improved in recent years. Additionally, AXA S.A. continues to provide substantial explicit and implicit support to AXA XL’s balance sheet and operations.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for XL Bermuda Ltd and the following subsidiaries:
- AXA Insurance Company
- AXA XL Reinsurance Ltd
- AXA XL Resseguros S.A.
- AXA XL Insurance Company UK Limited
- Catlin Insurance Company, Inc.
- Catlin Re Switzerland Ltd
- Greenwich Insurance Company
- Indian Harbor Insurance Company
- T.H.E. Insurance Company
- XL Insurance America, Inc.
- XL Insurance Company SE
- XL Insurance Company of New York, Inc.
- XL Insurance Switzerland Ltd
- XL Select Insurance Company
- XL Specialty Insurance Company
- XL Re Europe SE
- XL Reinsurance America Inc.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.