A.M. Best Affirms Endurance’s Ratings
Ratings agency A.M. Best Co. today [Mar.5] affirmed the financial strength rating [FSR] of A [Excellent] and issuer credit ratings [ICR] of “a” of Bermuda’s Endurance Specialty Insurance Ltd. and its affiliates.
Concurrently, A.M. Best has affirmed the ICR of “bbb” and debt ratings of the publicly traded parent, Endurance Specialty Holdings, Ltd. which is also domiciled in Bermuda. The outlook for all ratings is stable.
A Best analyst said the ratings reflect Endurance’s strong level of risk-adjusted capitalization, solid historical operating performance over the last few years and its specialty focused, diversified business profile.
“Endurance has continued to focus on writing agriculture insurance, which now accounts for approximately 30% of the company’s net premiums written, up from 20% in 2009,” said Best. “Some of that increase can be attributed to rising commodity prices. The agriculture insurance business is not linked to the property/casualty pricing cycle so it can offer a balance to the total underwriting portfolio.
“In addition, Endurance has built a solid enterprise risk management framework that has evolved with the company. In that regard, Endurance’s losses from the rash of global catastrophes in 2011 were within A.M. Best’s expectations.”
Partially offsetting these positive rating factors is Endurance’s exposure to large catastrophe losses as well as the current soft casualty market environment and uncertain financial markets said the ratings agency.
Best commented: “These challenges and other rating factors, which could lead to a ratings downgrade or a revision of the outlook to negative, include unfavorable operating profitability trends, outsized catastrophe or investment losses relative to expectations and peers, significant adverse loss reserve development and/or a material decline in risk-adjusted capital.
“Alternatively, factors that could lead to a ratings upgrade include sustained favorable operating profitability, coupled with maintenance of strong risk-adjusted capital levels.”
Endurance was founded at the end of 2001 with approximately $1.2 billion in capital. Based in Bermuda, the initial operation focused on property catastrophe reinsurance and excess coverage for large commercial insurance accounts.
Under the leadership of founding CEO, President and Chairman of the Board, Kenneth J. LeStrange, Endurance attracted and retained an exceptional management team, expanded its geographic reach and added new product lines and distribution channels to emerge as a leading global provider of insurance and reinsurance products and services.
Now entering its second decade of operations, Endurance has a solid balance sheet, diverse specialty capabilities, a worldwide client portfolio and a strong brand reputation.
The FSR of A (Excellent) and ICRs of “a” have been affirmed for Endurance Specialty Insurance Ltd and its following affiliates:
- Endurance Reinsurance Corporation of America
- Endurance Worldwide Insurance Limited
- Endurance American Specialty Insurance Company
- Endurance American Insurance Company
- Endurance Risk Solutions Assurance Co.
- American Agri-Business Insurance Company
The following debt ratings have been affirmed:
Endurance Specialty Holdings, Ltd.
– “bbb” on $335 million 7.0% senior unsecured notes, due 2034
– “bbb” on $200 million 6.15% senior unsecured notes, due 2015
– “bb+” on $200 million 7.75% Series A non-cumulative preferred
shares
– “bb+” on $230 million 7.50% Series B non-cumulative preferred
shares
The following indicative shelf ratings have been affirmed for debt
securities available under the existing shelf registration:
Endurance Specialty Holdings, Ltd.
– “bbb” on senior unsecured debt
– “bbb-”on subordinated debt
– “bb+” on preferred stock
Endurance Holdings Capital Trust I & II (guaranteed by
Endurance Specialty Holdings, Ltd.)
– “bb+” on preferred securities
