A.M. Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of a of Validus Reinsurance, Ltd. (Validus Re) (Hamilton, Bermuda) and its affiliate, Validus Reinsurance (Switzerland) Ltd. (Zurich, Switzerland). Additionally, A.M. Best has removed from under review with developing implications and affirmed the Long-Term ICR of bbb, as well as the existing Long-Term Issue Credit Rating (Long-Term IR) of Validus Holdings, Ltd. (Validus) (Hamilton, Bermuda), the ultimate parent company. The outlook assigned to these Credit Ratings (ratings) is stable. (See below for a detailed listing of the Long-Term IR.) Concurrently, A.M. Best has withdrawn the ratings of Validus Holdings at the companys request to no longer participate in A.M. Bests interactive rating process.
These rating actions follow the close of American International Group, Inc.s (AIG) [NYSE:AIG] acquisition of Validus and its subsidiaries in July 2018.
The ratings reflect Validus Res balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Validus Res balance sheet strength is supported by risk-adjusted capitalization at the strongest level, as measured by Bests Capital Adequacy Ratio (BCAR), as well as a high quality and liquid investment portfolio of high quality assets. Furthermore, Validus Re has a history of conservative reserving. The groups strongest level of capitalization allows it to absorb the catastrophe losses inherent in its businesses. Validus Res operating performance has been consistently strong on average, driven by solid underwriting profits and stable investment returns. The companys underwriting performance is supported by solid premium growth but has exhibited volatility given the recent catastrophe events. The group maintains a well-diversified business profile, focusing on reinsurance and asset management and should benefit from being part of the larger AIG enterprise and global business platform. Validus Re has developed, implemented and embedded a risk management framework that appropriately addresses the risks inherent in its profile, and its risk management capabilities generally meet or exceed its risk profile.
The following Long-Term IR has been removed from under review with developing implications and affirmed, with an assigned outlook of stable. Concurrently, A.M. Best has withdrawn the Long-Term IR at the companys request:
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Validus Holdings, Ltd. — bbb on $250 million 8.875% senior unsecured notes, due January 2040
This press release relates to Credit Ratings that have been published on A.M. Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and A.M. Best Rating Action Press Releases.
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