A.M. Best Affirms Allied World’s Ratings

Ratings agency A.M. Best has removed Allied World Assurance Co. Ltd. and its divisions from their status as “under review with negative implications” and affirmed Allied World’s financial strength rating of “A” (Excellent) and the long-term issuer credit ratings of “a+.”

A.M. Best said Allied World’s ratings reflect a strong balance sheet, as well as financial security in light of Fairfax Financial Holdings Ltd.’s acquisition of Allied World.

Toronto-based Fairfax Financial completed its acquisition of Allied World Assurance Co. Holdings, for US$4.9 billion, in July.

“Fairfax maintains financial flexibility, large levels of cash and marketable securities, and a track record of supporting its subsidiaries,” A.M. Best said.

While A.M. Best said Allied World still faces some challenges due to the natural catastrophe onslaught in late 2017, it expects Allied World to show continued resiliency.

“Despite relatively large losses reported from hurricanes and wildfires that struck the United States and Canada during the third quarter of 2017, the company’s net underwriting loss did not exceed its catastrophe risk tolerance level,” A.M. Best said.

A.M. Best added, however, that it expects the insurer’s underwriting performance “to be challenged to remain in line with its historical performance due to competitive pressure on its direct casualty business—it’s largest business segment, less favorable reserve development recognized over the past few years, and the expectation of more normalized property-catastrophe losses.”

A.M. Best also said that, “despite these challenges, Allied World remains well positioned, with a diversified portfolio of property/casualty insurance and reinsurance lines of business.”

Topics AM Best