|[September 19, 2013]
A.M. Best Affirms Ratings of Aspen Insurance Holdings Limited's U.S. Subsidiaries
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating of A
(Excellent) and issuer credit ratings of "a" of Aspen Specialty
Insurance Company (ASIC) (Bismarck, ND) and Aspen American
Insurance Company (AAIC) (Dallas, TX). Both companies are wholly
owned subsidiaries of their ultimate parent, Aspen Insurance Holdings
Limited (Aspen) (Bermuda) (NYSE:AHL). The outlook for all ratings is
These ratings are based upon ASIC and AAIC's strategic importance and
roles in Aspen's U.S. business platform. In addition, the ratings also
reflect the explicit support provided via the substantial quota share
reinsurance of ASIC and AAIC's net business through their Bermuda-based
affiliate, Aspen Bermuda Limited (ABL). Moreover, ABL also
provides a guarantee for all of ASIC and AAIC's third-party reinsurance
recoverables. Additionally, ASIC's balance sheet is further protected by
an adverse development cover for its outstanding loss reserves as of
December 31, 2008. The ratings also acknowledge the implied support of
future parental commitment.
Both ASIC and AAIC continue to maintain solid stand-alone
caitalization, which has been and continues to be enhanced by low
underwriting and investment leverage as well as capital contributions
from Aspen. While market competition continues to pose a significant
challenge to ASIC and AAIC as both companies work to establish Aspen's
presence in the United States, pricing pressures appear to be
diminishing as the commercial lines marketplace has been more receptive
to rate increases recently. Toward this end, management has made
significant investments in new underwriting teams and infrastructure.
A.M. Best will continue to closely monitor the operating performance of
both companies, with particular focus on execution and their ability to
achieve business projections.
Any future rating actions for ASIC and AAIC will likely be in accordance
with any future rating actions on ABL.
Factors that may lead to negative rating actions on both companies could
result from their continued sub-par operating results, a material
deterioration in their stand-alone risk-adjusted capitalization and/or
any lessening of support (implied or explicit) provided by ABL.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS
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