A.M. Best Affirms Ratings Of Arch Reinsurance

August 26, 2015

Rating company A.M. Best has affirmed the financial strength rating [FSR] of A+ [Superior] and the issuer credit ratings [ICR] of “aa-” of  Arch Reinsurance Ltd. and its strategic affiliates.

A statement from the ratings agency said, “The affirmations reflect Arch’s continued superior operating performance, consistently excellent capitalization and demonstrated enterprise risk management. The ratings also consider the depth and experience of the organization’s management team. Arch maintains a very strong underwriting culture and focuses on actively managing the cycle.

“The company has the agility to enter and exit chosen lines of business as market conditions dictate. The company is capable of writing a broad range of property/casualty insurance and reinsurance on a worldwide basis and focuses on specialty lines. In addition, Arch Capital has been growing its mortgage insurance operating platform, which will help to further diversify its product offerings.

“Since Arch’s inception, overall operating results have been very strong. In addition, Arch has historically reported stable and consistent financial results with lower levels of volatility than many of its peers. Arch has a conservative reserving philosophy, which helps to uphold its balance sheet strength.

“Partially offsetting these positive rating attributes are the current soft market conditions through which Arch, as well as all industry participants, must navigate.

“Factors that could result in negative rating pressure include unfavorable operating profitability trends, outsized catastrophe or investment losses relative to Arch’s peers, significant adverse loss reserve development or a material decline in risk-adjusted capital.

“However, factors that could lead to a positive outlook or rating upgrades would be the continuation of long term, consistently strong operating profitability relative to its peers and maintenance of strong risk-adjusted capital levels.”

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