A.M. Best Affirms Ironshore Insurance Ratings
Rating company A.M. Best has affirmed the financial strength rating of A [Excellent] and the issuer credit ratings [ICR] of “a” of Ironshore Insurance Ltd. [Bermuda] and its affiliated operating companies: Ironshore Indemnity Inc. [Minneapolis, MN], Ironshore Specialty Insurance Company [Phoenix, AZ] and Ironshore Europe Limited [Ireland] [collectively referred to as Ironshore]. Concurrently, A.M. Best has affirmed the ICR of “bbb” of Ironshore Inc. [Cayman Islands]. The outlook for all ratings is stable.
A statement from the ratings agency said, “The rating affirmations reflect Ironshore’s strong risk-adjusted capitalization, enhanced business profile as a specialty casualty underwriter and highly experienced management team. The organization continues to make solid development regarding the build-out and transformation of its franchise. In recent years, Ironshore has transformed its book of business to develop a select portfolio of global specialty risks.
“In addition, Ironshore continues to attract highly qualified insurance professionals with established business relationships to add depth to the organization. Qualitatively, this should prospectively solidify its position as a leading market for risk managers and major brokers in specialty insurance classes.
“These strengths are partially offset by Ironshore’s limited operating history and significant growth in medium-tail casualty classes of business during a soft phase of the casualty market. In A.M. Best’s opinion, this growth exposes the company to greater reserve risk due to the uncertainty associated with measuring ultimate loss costs for those longer-tailed classes of business.
“However, these concerns are somewhat mitigated by the extensive work that Ironshore has done with regard to establishing a rigorous framework for pricing and reserve adequacy. In determining the current ratings, A.M. Best recognizes the greater risk of unfavorable reserve development through the assessment of risk-adjusted capital tests performed, which provides a capital cushion for potential reserve deficiency.
“Accordingly, rating factors that could lead to rating downgrades for Ironshore 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 or a material decline in risk-adjusted capital. Alternatively, factors that could lead to rating upgrades include sustained favorable operating profitability, coupled with maintenance of strong risk-adjusted capital levels.”
