AM Best Affirms Credit Ratings Of AEGIS

June 29, 2022 | 0 Comments

AM Best has affirmed the Financial Strength Rating of A [Excellent] and the Long-Term Issuer Credit Rating of “a” [Excellent] of Associated Electric & Gas Insurance Services Limited [AEGIS] [Hamilton, Bermuda]. The outlook of these Credit Ratings [ratings] is stable.

The ratings agency said, “The ratings reflect AEGIS’ balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

“AEGIS’ strategy emphasizes risk diversification and a relatively conservative approach to capital preservation. This diversification is achieved through the successful combination of its energy mutual operations in the United States with Lloyd’s Syndicate 1225 in uncorrelated lines of business. AEGIS continues to maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio [BCAR], and has grown surplus consistently over the past 10 years.

“AEGIS’ historical focus on the U.S. and Canadian utility industry has in, the past, resulted in unfavorable loss experience in certain lines of business, although the diversification benefit from its Lloyd’s syndicate has continued to stabilize underwriting performance. Management continues to focus on the company’s operating performance by improving its risk management strategies, including premium rate adjustments, continued refinement of its underwriting criteria, and the prudent use of available reinsurance protection and modest limits. AEGIS continues to demonstrate a high member retention ratio, an adaptive and highly responsive management team and the continued expansion of programs within its corporate mission.

“Factors that could lead to positive rating actions for AEGIS are sustained favorable underwriting metrics, supported by strong internal capital generation. Factors that could affect the ratings negatively are increased underwriting volatility, significant investment losses or outsized catastrophe events in conjunction with a decline in the company’s risk-adjusted capitalization.”

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