AM Best Affirms Ratings For Cavello Bay
AM Best has affirmed an A [Excellent] rating for Bermuda-based Cavello Bay Re, a subsidiary of Enstar, citing strong financials and a stable outlook.
The ratings agency said, “AM Best has affirmed the Financial Strength Rating of A [Excellent] and a Long-Term Issuer Credit Rating of “a+” [Excellent] of Cavello Bay Reinsurance Limited [Cavello Bay] [Bermuda], a subsidiary of Enstar Group Limited [Enstar] [Bermuda]. The outlook of these Credit Ratings [ratings] is stable.
“The ratings reflect Cavello Bay’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
“The ratings affirmation underscores Cavello Bay’s continued solid total operating earnings, which are comprised of total investment returns and run-off liability earnings. Cavello Bay’s return on equity over the past 10 years was in line with its strong operating performance assessment.
“Enstar has maintained a steady deal flow through the cycle, demonstrating its favorable business profile, which will be augmented with live underwriting market facing activity once the acquisition of AF Group closes this year.
“AM Best expects Cavello Bay’s risk-adjusted capitalization to remain in the strongest range, as measured by the Best’s Capital Adequacy Ratio [BCAR], after its acquisition and integration of AF Group is complete.”
