A.M. Best Affirms Ratings of Aspen Insurance UK Limited and Aspen Insurance Holdings Ltd.; Revises Outlook to Negative From Stable.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and the issuer credit rating (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 Aspen Insurance UK Limited (AIUK AIUK Amnesty International UK AIUK Archery-Interchange UK (Online Archery Community) ) (United Kingdom). At the same time, A.M. Best has affirmed the ICR of "bbb" of AIUK's ultimate parent, Aspen Insurance Holdings Ltd. (AHL AHL American Hockey League AHL Action Half-Life (Half-Life modification) AHL Acyl Homoserine Lactone AHL Aramark Harrison Lodging AHL Acylated Homoserine Lactone AHL Association for the History of Language AHL Architects Hawaii Ltd ) (Bermuda) and the debt rating of "bbb" on the USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 250 million 6% senior notes issued by AHL. Concurrently, A.M. Best has affirmed the indicative ratings of "bbb" on senior unsecured notes, "bbb-" on subordinated notes, "bb+" on junior subordinated notes and "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. of AHL's USD 500 million universal shelf registration filed in February 2005. The outlook on all ratings has been revised to negative from stable. The negative outlook reflects the expected level of Aspen group's consolidated risk-adjusted capitalisation at year-end 2005, taking into account A.M. Best's two-event stress test. Although A.M. Best believes there is likely to be strengthening in 2006-2007, this is based on anticipated improvement in performance, which remains subject to significant volatility derived from the group's substantial property catastrophe account. A.M. Best believes AIUK's risk-adjusted capitalisation remains excellent, factoring a GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 87 million (USD 150 million) capital injection from AHL in January 2006 to compensate for the impact of the 2005 hurricane season. A.M. Best expects the maintenance of AIUK's current level of risk-adjusted capitalisation to be highly dependent on a reduction in exposure to major loss events implemented as part of a group-wide risk tolerance Risk Tolerance The degree of uncertainty that an investor can handle in regards to a negative change in the value of their portfolio. Notes: An investor's risk tolerance varies according to age, income requirements, financial goals, etc. reassessment. These measures help compensate for the potential volatility incurred due to the proportion of property 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. transferred to AIUK in 2006 as a result of a reciprocal quota share arrangement with AHL's Bermudan operation, Aspen Insurance Limited (AIL AIL 1. Angiocentric immunoproliferative lesion 2. Angioimmunoblastic lymphadenopathy ). A.M. Best anticipates a strong profit after tax in 2006 and a return on premium of more than 15% (factoring a return to normal levels of catastrophe experience). A.M. Best also expects a combined ratio of between 85%-90% and a stable investment return in excess of 3% in 2006. Despite exposure to the major catastrophes in the second half of 2005, A.M. Best expects AIUK to report a small profit after tax, although the combined ratio is likely to increase significantly from the 79.3% recorded in 2004. In A.M. Best's opinion, AIUK benefits from an excellent business profile based on its well established book of property and casualty reinsurance, primary U.K. commercial insurance, and specialty insurance and reinsurance business (comprises marine liability, hull, energy and aviation business). A.M. Best expects AIUK to report an increase in its gross premium written of approximately 4% in 2006, resulting primarily from the reciprocal quota share arrangement with AIL, and an anticipated 30% growth in its specialty account. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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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