Best Affirms Allied World ‘A+’ Rating

A.M. Best Co. announced that it has affirmed the financial strength rating of “A+” (Superior) of Bermuda-based Allied World Assurance Company, Ltd. (AWAC) and its reinsured operating subsidiaries with a stable outlook.

“The rating reflects AWAC’s superior risk-based capitalization, solid operating performance, experienced management team and strategic benefits AWAC received through its association with sponsoring organizations, American International Group (AIG) and Chubb,” said Best. “AWAC has established a diversified book of business in commercial property/casualty lines, which includes general and professional liability insurance, as well as coverage on energy, transportation and commercial real estate property risks. While AWAC’s initial focus was as a primary writer of such coverages, the company has expanded to provide other specialty and reinsurance lines of business. Since its inception, AWAC has successfully formed affiliates in both the United States and Europe.”

Best also noted that company is “expected to achieve a combined ratio below breakeven for the year ending December 31, 2004, despite losses from the third quarter’s extraordinary hurricane activity. AWAC continues to exhibit the benefits of an unencumbered balance sheet while also benefiting from associations with its sponsors. In particular, AIG affiliates provide AWAC with access to existing operational platforms in Bermuda, Europe and the United States.”

The rating agency indicated, however that “partially offsetting these strengths is competition from both new and established companies. The current level of insurance and reinsurance capacity has affected current pricing discipline, making AWAC somewhat challenged to maintain higher operating returns. This concern is mitigated, however, by management’s adherence to strict underwriting policies and willingness to reduce premium writings to maintain quality business.”