A.M. Best Affirms Ratings Of Assured Guaranty

June 19, 2017

Rating company A.M. Best has affirmed the Financial Strength Rating of A+ [Superior] and the Long-Term Issuer Credit Rating of “aa” of Assured Guaranty Re Overseas Ltd. [AGRO] [Bermuda]. The outlook of these Credit Ratings [ratings] is stable.

A statement from the ratings agency said, “The ratings reflect AGRO’s strong risk-adjusted capitalization, experienced management with a proven track record, prudent investment strategy and payment obligation support from its indirect parent.

“The ratings also recognize the company’s strong enterprise risk management framework and infrastructure. The ratings of AGRO also reflect its affiliation with Assured Guaranty Re Ltd. [AG Re], a wholly owned subsidiary of Assured Guaranty Ltd. [AGL], its ultimate parent. Affiliates of AGL also provide operational, underwriting and risk management support to AGRO.

“A.M. Best expects AGRO’s risk-adjusted capitalization to be maintained at an excellent level, supported by low projected underwriting leverage, the guarantee of the company’s payment obligations by its indirect parent, AG Re, and the benefits and support of a broader successful insurance franchise of AGL.

“Partially offsetting rating factors include a reduction in net income and net premiums earned during the past few years. In addition, the typical challenges posed by expanding into new targeted lines of business could have a negative impact on the execution of the company’s business plan.

“A rating trigger that could result in a positive rating action is AGRO meeting or exceeding its business plan, including profitability and risk-adjusted capitalization levels. Negative rating action could occur if AGRO fails to execute its business plan over the long term or if it experiences a dramatic decline in its risk-adjusted capitalization, unfavorable operating results or instability at the parent level.”

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