LONDON, September 22, 2022–(BUSINESS WIRE)–AM Best affirmed the financial strength ratings (FSR) of A (Excellent) and the long-term credit ratings (Long-term ICR) of “a+” (Excellent) of Ascot Bermuda Limited (Ascot Bermuda) (Bermuda), as well as as Ascot Insurance Company (AIC), Ascot Specialty Insurance Company (ASIC) and Ascot Surety & Casualty Company (ASCC) (all based in New York, NY, unless otherwise noted). AIC, ASIC and ASCC are collectively referred to as Ascot Insurance US Group (Ascot US). At the same time, AM Best confirmed the FSR of A (Excellent) and the long-term ICR of “a” (Excellent) of AmFed National Insurance Company and its wholly reinsured subsidiaries, AmFed Casualty Insurance Company and AmFed Advantage Insurance Company. These companies are domiciled in Ridgeland, MS and collectively referred to as AmFed Insurance Group (AmFed). AM Best has also affirmed the long-term issue credit rating of “bbb+” (good) of the $400 million fixed rate senior unsecured notes, 4.25%, due 2030, issued by Ascot Group Limited (Ascot). The outlook for these Credit Ratings (ratings) is stable.
The ratings of Ascot Bermuda and Ascot US reflect the strength of Ascot’s consolidated balance sheet, which AM Best rates as the strongest, as well as its adequate operating performance, neutral business profile and risk management. appropriate (ERM) company. In addition, Ascot benefits from an upgrade in the rating of its parent company, CPP Investments, which is considered to have superior financial strength and support Ascot’s strategy. AM Best views Ascot Bermuda and Ascot US as strategically important to Ascot; Ascot Bermuda is a platform for growth in the Bermuda (re)insurance market, while Ascot US is expected to become a source of diversification and growth in the US E&S and admitted lines market. Both are fully integrated into the operations and management of the group with Ascot US backed by a net worth maintenance agreement.
Ascot is a property and specialty (re)insurance group, with a gross written premium in 2021 of USD 2.8 billion. Ascot US and Ascot Bermuda are increasingly diversifying the underwriting portfolio of this group, which has historically focused on real estate risks in the United States. Although the expansion remains subject to moderate execution risk, Ascot has a stable and experienced management team which has been appropriately strengthened as its business has grown.
The strength of the group’s balance sheet is underpinned by its risk-adjusted capitalization which AM Best expects to maintain at the highest level, as measured by Best’s capital adequacy ratio (BCAR), supported by management cautious of capital. Assessing the strength of the balance sheet benefits from the excellent financial flexibility offered by CPP Investments. Since acquiring Ascot Underwriting Holdings Limited in 2016, CPP Investments has made several capital injections to support the group’s growth, demonstrating its continued commitment.
Ascot has a track record of strong underwriting performance, demonstrated by Syndicate 1414’s five-year weighted average combined ratio of 94.4% over the period 2017-2021, which was around 10 percentage points lower than the same metric for the entire Lloyd’s market. In 2021, despite generating a technical profit, Ascot recorded an overall loss of $30 million, compared to a profit of $150 million in 2020, due to unrealized investment losses following interest rate hikes. ‘interest. AM Best expects these unrealized losses to have a transitory effect on Ascot’s bottom line and that the group will recover these losses in the medium term.
AmFed’s ratings reflect the strength of its balance sheet, which AM Best rates as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also take into account, in the form of a lift, the support it receives from Ascot, its parent company. Ascot provides financial support through a net worth maintenance agreement and operational support which includes but is not limited to investment, risk management, distribution and other functions of back office.
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 relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Scores, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.
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 more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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