Aspen Insurance (NYSE:AHL)
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From Oct 2019 to Oct 2024
A.M. Best Co. has affirmed the financial strength ratings of A
(Excellent) and the issuer credit ratings (ICR) of “a” of Aspen
Insurance UK Limited (AIUK) (United Kingdom) and Aspen Insurance
Limited (AIL) (Bermuda). A.M. Best has also affirmed the ICR of
“bbb” of Aspen Insurance Holdings Limited (Aspen) (Bermuda)
[NYSE: AHL], the non-operating holding company of the Aspen group of
companies, and the debt rating of “bbb” on the USD 250 million 6% senior
unsecured notes issued by Aspen. The USD 200 million perpetual
non-cumulative preference shares and the USD 230 million perpetual
preferred income equity replacement securities, also issued by Aspen,
have been upgraded to “bb+” from “bb”. In addition, A.M. Best has
affirmed the ratings for Aspen’s universal shelf registrations of “bbb,”
“bbb-” and “bbb-” on senior unsecured debt, subordinated debt and the
junior subordinated debt and upgraded the preferred stock to “bb+” from
“bb”. The outlook for all ratings remains stable.
A.M. Best believes that AIL and AIUK are likely to maintain excellent
risk-adjusted capitalisation in 2008. Additionally, AIL and AIUK will
continue to benefit from the financial flexibility of their parent,
which is expected to maintain excellent consolidated risk-adjusted
capitalisation in 2008. Aspen continues to balance its spread of risk
between AIL and AIUK through the use of the group’s intra-group quota
share arrangements. In A.M. Best’s opinion, the level of capital held at
AIL is likely to be sufficiently strong to support the company’s
increased underwriting exposure, arising from the overall higher
reinsurance ceded through quota shares from AIUK and its new reinsurance
arrangement with Aspen Underwriting Limited (AUL) (Aspen’s corporate
member for Lloyd’s Syndicate 4711).
A.M. Best believes that AIL and AIUK will report strong pre-tax profits
in 2008. Good underwriting performance is anticipated, notwithstanding
the impact of hurricanes Gustav and Ike and softening in rates. A.M.
Best believes that Aspen will generate a positive, albeit lower
investment return in 2008, despite the turbulence in the financial
markets. Financial performance for both entities is expected to be
enhanced by the group’s conservative investment strategy. Further ahead,
A.M. Best expects prudent reserving practices and the group’s
comprehensive reinsurance programme to support stable results.
In A.M. Best’s opinion, AIL and AIUK benefit from Aspen’s profile, which
has developed as a result of the range of business written and its wide
spread of branch operations. Both entities underwrite a well-diversified
portfolio of property, casualty and specialty business (insurance and
reinsurance), supported by the intra-group quota share arrangements.
Additionally, AIL underwrites a book of structured property and casualty
risks. AIUK is the largest subsidiary within AHL, representing
approximately 75% of the group’s consolidated premium income in 2008,
whilst AIL’s income before intra-group quota shares is expected to
contribute approximately 20%. A.M. Best anticipates that the proportion
of premium written by AIUK will decline in the future, as Aspen expands
through syndicate 4711 and Aspen Specialty Insurance Company (ASIC)
(wholly owned U.S. subsidiary of Aspen). The premium contribution from
AIL is expected to remain relatively unchanged.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit www.ambest.com.