MS Amlin’s Long-Term Issuer Credit Rating Downgraded by AM Best

AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a+” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) of MS Amlin AG (Switzerland).

The outlook of the Long-Term ICR has been revised to stable from negative, whereas the outlook on the FSR is stable. These credit ratings reflect MS Amlin AG’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. In addition, MS Amlin’s ratings benefit from rating enhancement, in the form of lift, due to the support provided by its ultimate parent, MS&AD Insurance Group Holdings Inc. (MS&AD).

The downgrade of the Long-Term ICR reflects a deterioration of the company’s risk-adjusted capitalization to the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR), due to multiple years of operating losses, coupled with recent strong premium growth, the ratings agency said.

While risk-adjusted capitalization is expected to recover moderately over the medium term, AM Best expects it to remain at a lower level than it was historically.

The company’s underwriting profitability has been under pressure, demonstrated by a five-year (2017-2021) weighted average combined ratio of approximately 110% (including a combined ratio of 123% in 2021), AM Best said. However, underwriting results were marginally positive in 2022, and are expected to continue to improve as a result of corrective actions taken by the company’s new management team.

The company’s profile benefits from its relationship with its ultimate parent, MS&AD, and its recent rebranding to MS Reinsurance further strengthens its association with the MS&AD group.

Source: AM Best

Topics Mississippi AM Best