AM Best has upgraded Group Ark Insurance Limited’s (GAIL) (Bermuda) Long-Term Issuer Credit Rating to “a+” (Excellent) from “a” (Excellent) and affirmed its Financial Strength Rating of A (Excellent).
GAIL is a wholly owned subsidiary of Ark Insurance Holdings Limited (Ark), the non-operating holding company of the Ark group.
The outlook on the Long-Term Issuer Credit Rating has been revised to stable from positive, while the outlook for the Financial Strength Rating is stable.
The rating agency has also upgraded the Long-Term Issue Credit Ratings on GAIL’s outstanding rated instruments, with the outlooks revised to stable from positive.
AM Best said the ratings reflect Ark’s consolidated balance sheet strength, which it assesses as very strong, alongside its strong operating performance, neutral business profile, and appropriate enterprise risk management.
The ratings also recognise GAIL’s strategic importance to Ark as the group’s Bermuda-based re/insurance vehicle, which provides reinsurance to Ark’s corporate member at Lloyd’s and writes third-party re/insurance business.
The upgrade to the Long-Term Issuer Credit Rating further reflects Ark’s track record of profitability at a level consistent with a strong operating performance assessment, supported by effective cross-cycle underwriting management.
Ark’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects this to remain at that level, supported by good internal capital generation. The balance sheet strength assessment also factors in Ark’s prudent reserving, low-risk investment portfolio, strong financial flexibility, and solid liquidity profile.
The company’s material exposure to catastrophe risk is a partially offsetting factor, though AM Best expects this to be managed through the use of reinsurance and robust exposure management.
The strong operating performance assessment reflects the group’s solid overall results. AM Best expects Ark to maintain robust technical returns over the underwriting cycle, despite potential volatility from its catastrophe-exposed property business. Recent underwriting performance has been resilient to major losses, while earnings have been supported by solid investment income, boosted by higher interest rates in recent years.
Ark’s neutral business profile assessment reflects its diversified underwriting portfolio across its Lloyd’s and Bermuda re/insurance platforms.
The post AM Best upgrades Group Ark Insurance Limited’s Issuer Credit Rating appeared first on ReinsuranceNe.ws.
