Best’s News & Research Service - September 07, 2023 04:19 PM (EDT)
AM Best Affirms Credit Ratings of AXIS Capital Holdings Limited and Its Operating Subsidiaries
- September 07, 2023 04:19 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of the operating subsidiaries of AXIS Capital Holdings Limited (Pembroke, Bermuda), collectively referred to as AXIS. Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and the existing indicative Long-Term Issue Credit Ratings (Long-Term IR) of AXIS Capital Holdings Limited. The outlooks of all Credit Ratings (ratings) are stable. (See below for a detailed listing of subsidiaries and indicative Long-Term IRs.)
The ratings reflect AXIS’ balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM) from the group’s risk profile.
AXIS continues to maintain the strongest levels of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which places its balance sheet strength in the strongest category. The group’s balance sheet strength assessment is supported by financial flexibility at the holding company level and within the operating subsidiaries, while also reflecting capital management strategies that have included consistent common and preferred dividends, as well as share repurchases. Reserves have consistently run off favorably over the last 10-year period, reflecting the company’s reserving controls efficiency. Financial leverage is elevated when compared to its peers, but remains largely in line with the company’s expectations.
AXIS’ operating performance is assessed as adequate, as its underwriting results over the recent five-year period have been volatile. However, AXIS has implemented corrective measures to address and reverse volatility by exiting the property-catastrophe reinsurance business. These implemented changes have favorably impacted profitably measures with the group’s loss and combined ratios improving significantly.
AM Best categorizes AXIS’ business profile as favorable, as the group consistently ranks in AM Best’s Global Reinsurance 50 largest reinsurance enterprises. Despite some recent changes to its business mix the group still retains a well-diversified profile as a specialty underwriter of complex risks with a significant presence in the Lloyd’s market. The group’s ERM is sophisticated and embedded throughout the organization. AM Best believes that AXIS’ risk management is appropriate given its complex risk profile.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following subsidiaries of AXIS Capital Holdings Limited:
• AXIS Specialty Limited
• AXIS Re SE
• AXIS Reinsurance Company
• AXIS Specialty Europe SE
• AXIS Surplus Insurance Company
• AXIS Insurance Company
The following indicative Long-Term IRs under the current shelf registration have been affirmed with stable outlooks:
AXIS Capital Holdings Limited—
— “bbb+” (Good) on senior unsecured debt
— “bbb” (Good) on subordinated debt
— “bbb-” (Good) on preferred stock
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.