A.M. Best Affirms Ratings of AXIS Specialty Limited and Debt Ratings of AXIS Capital Holdings Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A (Excellent) and the issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a" of AXIS Specialty Limited (AXIS) and its operating affiliates. Concurrently, A.M. Best has affirmed the ICR of "bbb" and all existing debt ratings of AXIS Capital Holdings Limited (NYSE NYSE See: New York Stock Exchange : AXS AXS Access AXS Anomalous X-Ray Scattering AXS Alpha Chi Sigma AXS Alpha X-Ray Spectrometer AXS Activex Script ) (both of Hamilton, Bermuda). A.M. Best has also assigned debt ratings to AXIS Capital Holdings Limited and has assigned an FSR and ICR to AXIS Insurance Company. The outlook for all ratings is stable. (See below for a detailed list of the ratings.) The ratings of AXIS reflect its excellent risk-based capitalization, strong operating performance, a highly experienced management team and well established broker relationships. AXIS continues to maintain a diversified book of business, both geographically and by line of business, which focuses on broker-sourced short- and medium-tail lines, principally specialty lines in property, marine, energy and aerospace, along with property catastrophe reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. coverage. The company has selectively expanded into professional lines and increased its writings in umbrella and excess liability coverages. Casualty lines now account for approximately 30% of AXIS' gross premium writings. Although AXIS experienced net losses of approximately $1 billion relating to the 2005 hurricane season, its strong capitalization, effective catastrophe management and efficient risk management controls produced a combined ratio just over breakeven at 101.8%. Operating results through March 31, 2006 continue to be strong with a 79.5% combined ratio and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. at $3.6 billion. AXIS' solid operating performance is somewhat tempered by its short operating history. Due to the long-tail nature of its casualty business, the consistency and sustainability of this segment's operating performance has yet to be proven. However, it is noted that a significant portion of this long-tail business is related to professional lines, which are primarily written on a claims-made basis. John Charman, Chief Executive Officer has announced his retirement from AXIS upon the expiration of his existing employment agreement on December 31, 2008. Mr. Charman's leadership has been key to AXIS' formation and success. As a succession plan has not yet been delineated, A.M. Best will focus on the successor plans when available and evaluate the effect on the company's future operating performance and marketing position. Despite these concerns, A.M. Best expects AXIS to continue managing its capital base very conservatively within acceptable ranges to support its current ratings and meet the more stringent capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. for a recently established Bermuda entity. The FSR of A (Excellent) and ICRs of "a" have been affirmed for AXIS Specialty Limited and its following operating affiliates: --AXIS Re Limited --AXIS Reinsurance Company --AXIS Specialty Europe Limited --AXIS Specialty Insurance Company --AXIS Surplus Insurance Company The following debt rating has been affirmed: AXIS Capital Holdings Limited-- --"bbb" on $500 million 5.75% senior unsecured notes, due 2014 The following indicative ratings have been affirmed under the current shelf registration: AXIS Capital Holdings Limited-- --"bbb" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. --"bbb-" on subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". --"bb+" on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. AXIS Capital Trust I, II & III (guaranteed by AXIS Capital Holdings Limited)-- --"bb+" on preferred securities The ICR of "bbb" has been affirmed for AXIS Capital Holdings Limited. The FSR of A (Excellent) and ICR of "a" have been assigned to AXIS Insurance Company. The following debt ratings have been assigned: AXIS Capital Holdings Limited-- --"bb+" on $250 million 7.25% non-cumulative preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , Series A --"bb+" on $250 million 7.50% non-cumulative preferred shares, Series B A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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