AM Best Information Services

SEPTEMBER 29, 2020 01:56 PM (EDT)

AM Best Affirms Credit Ratings of XL Bermuda Ltd and Its Main Property/Casualty Subsidiaries

 Dan Hofmeister, CFA, CAIA, CPCU, ARe
Financial Analyst
+1 908 439 2200, ext. 5385

Mariza Costa
Associate Director
+1 908 439 2200, ext. 5154

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - SEPTEMBER 29, 2020 01:56 PM (EDT)
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” of XL Bermuda Ltd (Bermuda) and its property/casualty subsidiaries (collectively referred to as XL). The outlook of these Credit Ratings (ratings) is stable.

Concurrently, AM Best has upgraded the FSR to A+ (Superior) from A- (Excellent) and the Long-Term ICR to “aa-” from “a-” of T.H.E. Insurance Company (T.H.E.) (Baton Rouge, LA). At the same time, AM Best has upgraded the FSR to A+ (Superior) from B++ (Good) and the Long-Term ICR to “aa-” from “bbb” of AXA Corporate Solutions Brasil e America Latina Resseguros S.A. (AXA CS Latam) (Brazil). The outlook of these ratings is stable.

The rating upgrades reflect the efforts to simplify the post-merger AXA XL organization. As a result, both T.H.E. and AXA CS Latam have been further incorporated into the operations and financials of XL Bermuda Ltd. This affords both companies more significant implicit and explicit support. As such, the credit profile of T.H.E. and AXA CS Latam now are in line with the overall group’s credit profile.

The ratings of XL reflect the organization’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management. The ratings also reflect XL’s strategic importance to, and alignment with AXA S.A. (AXA or AXA group), which enhances XL’s position in the global commercial property/casualty insurance sector. XL is considered well-integrated within the AXA group, and AM Best expects that prompt and sufficient operational and financial support will be made available from the AXA group to XL, should it be required.

In recent years, XL operating performance has been dampened by volatility in underwriting results. This volatility stems primarily from poorly performing primary insurance lines. However, XL has also been impacted by numerous catastrophe events in recent years, as well as the COVID-19 pandemic in 2020. In February of 2020, XL hired a new CEO, Scott Gunter, and began the process of restructuring the leadership team to fit a new operating strategy. Along with the leadership changes, the group also began to re-evaluate business lines and make underwriting changes when necessary. These changes remain a fluid process, and AM Best anticipates improvement in the underlying underwriting performance as they are implemented. However, further deterioration in underlying operating performance could further stress the operating performance assessment in future years.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” have been affirmed, with stable outlooks for XL Bermuda Ltd and the following property/casualty subsidiaries:

  • AXA Insurance Company

  • Catlin Indemnity Company

  • Catlin Insurance Company, Inc.

  • Catlin Re Switzerland Ltd

  • Catlin Specialty Insurance Company

  • Greenwich Insurance Company

  • Indian Harbor Insurance Company

  • XL Catlin Insurance Company UK Limited

  • XL Insurance America, Inc.

  • XL Insurance Company SE

  • XL Insurance Company of New York, Inc.

  • XL Insurance Switzerland Ltd

  • XL Re Europe SE

  • XL Reinsurance America Inc.

  • XL Select Insurance Company

  • XL Specialty Insurance Company

The FSR has been upgraded to A+ (Superior) from A- (Excellent) and the Long-Term ICRs to “aa-” from “a-” with stable outlooks for the new members of XL Bermuda Ltd:

  • T.H.E. Insurance Company

  • AXA Corporate Solutions Brasil e America Latina Resseguros S.A.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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