Best Affirms Ariel Re, Ariel Holdings Ratings; Outlook Stable

A.M. Best Co. has affirmed the financial strength rating (FSR) of’ ‘A-‘ (Excellent) and issuer credit rating (ICR) of “a-” of Bermuda-based Ariel Reinsurance Company Ltd., as well as the ICR of “bbb-” of Ariel Holdings, Ltd. The outlook for all of the ratings is stable.

The ratings reflect Ariel Re’s “strong level of risk-adjusted capitalization and favorable operating performance since inception, experienced management team and continued development of its business profile and enterprise risk management capabilities,” said Best. The ratings also “recognize the benefits garnered from being a member of Ariel Holdings and the diversification of the group’s operating platforms.”

As partial offsetting factors Best cited the company’s “exposure to high severity, low frequency events as a property catastrophe writer, potentially exposing underwriting results to wide variations from year to year. However, the company’s risk-adjusted capital is at levels that have been stress tested to absorb significant catastrophe losses and therefore mitigate this concern.”

Best said the stable outlook reflects its expectations that “underwriting results will continue to benefit from Ariel Re’s selective underwriting strategy and that the group will continue to produce favorable operating results and maintain excellent risk-adjusted capital levels.

“Ariel Re’s business profile continues to develop with the goal of diversifying lines of business written in segments uncorrelated to the property catastrophe business. Ariel Re has demonstrated solid enterprise risk management fundamentals, but has yet to be tested over extended softening underwriting conditions.”

Source: A.M. Best

Topics Trends