AM Best Affirms Credit Ratings Of Everest Re

June 20, 2022 | 0 Comments

AM Best has affirmed the Financial Strength Rating of A+ [Superior] and the Long-Term Issuer Credit Ratings of “aa-” [Superior] of the operating subsidiaries of Bermuda-based Everest Re Group.

Concurrently, AM Best has affirmed the Long-Term ICRs of “a-” [Excellent] of Everest Re Group, Ltd. and Everest Reinsurance Holdings, Inc. [Delaware]. Additionally, AM Best has affirmed the Long-Term Issue Credit Ratings of Everest Reinsurance Holdings, Inc. The outlook of these Credit Ratings is stable.

The ratings agency said, “The ratings reflect Everest’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, very favorable business profile and appropriate enterprise risk management for the group’s risk profile.

“AM Best’s assessment of Everest’s balance sheet strength as strongest is attributed to the group’s levels of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio [BCAR]. Also reflected in the group’s balance sheet strength assessment is Everest’s high quality of capital and a retrocession program that helps limit downside risk.

“The group maintains a very favorable business profile as a leading non-life reinsurer, ranking No. 7 in the most-recent version of AM Best’s Top 15 Global Non-Life Reinsurance Groups. Everest also provides additional market capacity through its Mt. Logan Re platform, and Kilimanjaro Re catastrophe bonds. Despite its historical property-catastrophe focus, Everest has grown in other lines of business and has continued to build out its primary insurance segment footprint. AM Best believes that Everest’s very favorable business profile has helped the group generate profitable business under very competitive conditions.

“Everest has produced operating performance metrics that consistently outperform its peer group despite exposure to shock loss events as it continues to shift to a lower volatility risk profile. AM Best believes Everest’s performance is partially attributable to its well-established risk management infrastructure, which is embedded across the organization. Everest also benefits from a relatively low expense ratio that allows the group to absorb more readily significant losses compared with many of its peers. Everest’s insurance segment has provided meaningful earnings diversification.

“Positive rating movement is unlikely in the near term. Rating factors that could lead to negative rating actions include deteriorating trends in operating profitability or outsized catastrophe or investment losses relative to peers and/or AM Best expectations.”

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