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A.M. Best Affirms Ratings of Allied World Assurance Company Holdings, AG and Its Subsidiaries
[December 16, 2014]

A.M. Best Affirms Ratings of Allied World Assurance Company Holdings, AG and Its Subsidiaries


A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a+" of Allied World Assurance Company, Ltd (Allied World) and its operating affiliates. The outlook for all ratings is stable.

Concurrently, A.M. Best has affirmed the ICRs of "bbb+" of the ultimate parent, Allied World Assurance Company Holdings, AG (AWH) (Switzerland)(NYSE:AWH), and its downstream holding company Allied World Assurance Company Holdings, Ltd (Allied World Holdings Bermuda). A.M. Best also has affirmed the debt ratings of "bbb+" of Allied World Holdings Bermuda. The outlook for these ratings is stable. All the above companies are domiciled in Bermuda, unless otherwise specified. (See below for a detailed listing of the companies and debt ratings.

The ratings reflect the company's diversified business mix, excellent risk-adjusted capitalization, experienced management team and comprehensive enterprise risk management framework. The ratings also reflect Allied World's consistently strong operating performance, proven risk management culture and successful track record of expansion in terms of geography, products and distribution. These positive rating attributes have placed Allied World in a strong position to successfully execute its business plans. Allied World's operations continue to be enhanced, while delivering strong results.

Partially offsetting these positive rating factors is Allied World's casualty orientation, as pricing for this class of business is cyclical and currently very competitive. The longer-tail nature of this business lends to greater uncertainty as regards reserve adequacy. Nonetheless, Allied World has chosen a targeted business strategy, while taking steps to refine its cycle management capability. Allied World's focus on casualty business also has helped to limit its exposure to the global catastrophes that have taken place over the past few years. Furthermore, Allied World appears to have a prudent reserving philosophy, maintaining a significant cushion of incurred but not reported reserves. This conservative reservingposture has enabled the company to consistently recognize favorable loss reserve development since its inception in 2001 and has contributed to its strong operating returns through the current soft phase of the casualty market.



Factors that could lead to Allied World's ratings being upgraded would be the continuation of long-term, consistently strong operating profitability and maintaining excellent risk-adjusted capital levels commensurate with its ratings. If Allied World can sustain its historical results going forward, the company will have demonstrated it has built a business model that is well established to withstand varying market conditions and support a higher financial strength rating.

Factors that could lead to the company's ratings being downgraded and/or receiving a negative outlook include unfavorable operating profitability trends, outsized insurance or investment losses, any future shortfall in reserves and a substantial decline in risk-adjusted capital that would not be supportive of the current rating levels.


The ICRs of "a+" have been affirmed and the FSR of A (Excellent) has been affirmed for Allied World Assurance Company, Ltd and its operating affiliates:

  • Allied World Assurance Company (U.S.) Inc.
  • Allied World National Assurance Company
  • Allied World Insurance Company
  • Allied World Assurance Company (Europe) Limited
  • Allied World Surplus Lines Insurance Company
  • Darwin National Assurance Company
  • Vantapro Specialty Insurance Company

The following debt ratings have been affirmed:

Allied World Assurance Company Holdings, Ltd-
-- "bbb+" on $300 million 5.5% senior unsecured notes, due 2020
-- "bbb+" on $500 million 7.5% senior unsecured notes, due 2016 (all notes are unconditionally and irrevocably guaranteed by AWH)

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.

Key insurance criteria reports utilized:

  • Rating Members of Insurance Groups
  • Risk Management and the Rating Process for Insurance Companies
  • Understanding BCAR for Property/Casualty Insurers
  • Understanding Universal BCAR
  • Insurance Holding Company and Debt Ratings

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center.

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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


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