A.M. Best Upgrades Ratings of Arch Reinsurance Ltd.OLDWICK, N.J. -- A.M. Best Co. has upgraded 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. ) to A (Excellent) from 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. ) to "a" from "a-" of Arch 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. Ltd. (Arch) (Bermuda) and its reinsured affiliates. A.M. Best also has upgraded the ICR to "bbb-" from "bb+" of Arch Capital Group (U.S.) Inc. (Greenwich, CT). Concurrently, A.M. Best has upgraded the ICR to "bbb" from "bbb-" and all related debt ratings of Arch Capital Group Limited (Bermuda) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ACGL ACGL Arch Capital Group Ltd. ACGL Automobile Corporation of Goa Limited ACGL Alternative County Government Law ). The outlook for all ratings is stable. (See below for a detailed list of the ratings.) These rating upgrades reflect Arch's excellent capitalization, strong operating performance since its inception and robust risk management system. The company's proven risk management capability has enabled recent and historical operating performance to be among the leaders in the Bermuda market as evidenced by a 2005 combined ratio of 95.8%, despite net catastrophe losses totaling approximately $330 million for the year. Arch, along with its affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. , offers primary and reinsurance coverage for both property/casualty lines on a worldwide basis. The combination of Arch's risk management characteristics, operational controls and diversified business profile have created an organization capable of effectively responding to changes in the market cycle. Furthermore, the company's solid financial flexibility provides strong access to both debt and equity markets. Arch's financial leverage measures remain low as compared to the industry. A.M. Best expects the company to maintain financial leverage as measured by debt and preferred-to-total capital below 20%, while fixed charge coverage is expected to remain in the upper single digit range. Arch's reinsurance and insurance casualty loss reserve positions for earlier accident years have been maturing and proven to be within conservative ranges. The absence of adverse development in these reserves has provided A.M. Best with comfort concerning the company's initial loss ratio assumptions. Partially offsetting these strengths will be Arch's ability to maintain its underwriting discipline and competitive position within its chosen markets given the additional capital that has entered the industry through new company formations, sidecars and strong 2006 earnings. The FSR has been upgraded to A (Excellent) and the ICRs to "a" for Arch Reinsurance Ltd. and its following reinsured affiliates: * Arch Reinsurance Company * Arch Insurance Company * Arch Specialty Insurance Company * Arch Excess & Surplus Insurance Company The ICR has been upgraded to "bbb" for Arch Capital Group Limited. The ICR has been upgraded to "bbb-" for Arch Capital Group (U.S.) Inc. The following debt ratings have been upgraded: Arch Capital Group Limited-- -- to "bbb" from "bbb-" on $300 million 7.35% senior unsecured notes, due 2034 -- to "bb+" from "bb" on $200 million 8% non-cumulative Series A 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. -- to "bb+" from "bb" on $125 million 7.875% non-cumulative Series B preferred shares The following indicative shelf ratings have been upgraded for debt securities available under the existing shelf registrations: Arch Capital Group Limited-- -- to "bbb" from "bbb-" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. -- to "bbb-" from "bb+" on senior 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". -- to "bb+" from "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. Arch Capital Group (U.S.) Inc. --(guaranteed by Arch Capital Group Limited) -- to "bbb" from "bbb-" on senior unsecured debt 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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion