AM Best Affirms Arch Reinsurance’s Ratings
AM Best has affirmed the Financial Strength Rating [FSR] of A+ [Superior] and the Long-Term Issuer Credit Ratings [Long-Term ICR] of “aa-” [Superior] for Arch Reinsurance Ltd. and its strategic affiliates.
The ratings agency said, “Concurrently, AM Best has affirmed the Long-Term ICRs of “a-” [Excellent] and the Long-Term Issue Credit Ratings [Long-Term IRs] of Arch Capital Group Ltd. [Arch Capital] [Bermuda] [NASDAQ: ACGL], the ultimate holding company; Arch Capital Group [US] Inc [Delaware]; and Arch Capital Finance LLC [Delaware]. [See below for a detailed listing of the companies and ratings.] The outlook of these Credit Ratings [ratings] is stable.
“The ratings of Arch reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management [ERM].
“Arch’s ratings are based on its historically strong operating performance, as well as its balance sheet strength assessment of strongest, as measured by Best’s Capital Adequacy Ratio [BCAR], and strong management team. Arch performed favorably 2023, with the group producing record high earnings. Arch also has maintained its strong risk-adjusted capital position, which contemplates a significant stressed ultimate loss, as calculated according to AM Best’s “Evaluating Mortgage Insurance” criteria procedure. AM Best utilized a conservative stress scenario for Arch’s mortgage insurance book of business when calculating stress-tested risk-adjusted capitalization. AM Best also recognizes that the mortgage insurance business relies heavily on financial models that can vary from actual results.
“The stable outlooks reflect AM Best’s expectations that the group’s strongest level of balance sheet strength will continue to be supported by strong and stable operating performance, favorable reserve development, diverse business profile and well-defined ERM program.
“The FSR of A+ [Superior] and the Long-Term ICRs of “aa-” [Superior] have been affirmed with stable outlooks for Arch Reinsurance Ltd. and its following affiliates:
- Arch Reinsurance Company
- Arch Insurance Company
- Arch Specialty Insurance Company
- Arch Property Casualty Insurance Company
- Arch Indemnity Insurance Company
- Arch Insurance Canada Ltd.
- Alwyn Insurance Company Limited
- Arch Insurance [UK] Limited
“The following Long-Term IRs have been affirmed with stable outlooks:
Arch Capital Group Ltd.—
- “a-” [Excellent] on $300 million 7.35% senior unsecured notes, due 2034
- “bbb” [Good] on $450 million 5.25% non-cumulative preferred shares, Series E
- “bbb” [Good] on $330 million 5.45% non-cumulative preferred shares, Series F
Arch Capital Group [US] Inc [guaranteed by Arch Capital Group Ltd.]—
- “a-” [Excellent] on $500 million 5.144% senior unsecured notes, due 2043
Arch Capital Finance LLC [guaranteed by Arch Capital Group Ltd.]—
- “a-” [Excellent] on $500 million 4.011% senior unsecured notes, due 2026
- “a-” [Excellent] on $450 million 5.031% senior unsecured notes, due 2046
“The following indicative Long-Term IRs under the existing shelf registration have been affirmed with stable outlooks:
Arch Capital Group Ltd.—
- “a-” [Excellent] on senior unsecured debt
- “bbb+” [Good] on subordinated debt
- “bbb” [Good] on preferred stock
Arch Capital Group [US] Inc [guaranteed by Arch Capital Group Ltd.]—
- “a-” [Excellent] on senior unsecured debt
- “bbb+” [Good] on subordinated debt
- “bbb” [Good] on preferred stock
