AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of aa- of the operating subsidiaries of AXIS Capital Holdings Limited (Pembroke, Bermuda), collectively referred to as AXIS. Additionally, AM Best has affirmed the Long-Term ICR of a- and the existing Long-Term Issue Credit Ratings (Long-Term IR) of AXIS Capital Holdings Limited. The outlook of these Credit Ratings (ratings) remain negative. (See below for a detailed listing of subsidiaries and Long-Term IRs.)
The ratings reflect AXIS balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM) from the groups risk profile.
The negative outlook reflects concerns regarding AXIS operating performance. Historically, AXIS operating performance was among the top in its peer group. Concerns have centered on the groups insurance segment, with combined ratios trending higher and underwriting income pressured by 2017s insurance segment underwriting losses, which eroded just over four years of underwriting income due to natural catastrophe losses. However, AXIS has taken measures to address these issues and, despite elevated catastrophic activity in 2018, the insurance segment produced its strongest results since 2014. Overall earnings for 2018 were impacted by natural catastrophe losses, but they remained well within risk tolerances. Going forward, AM Bests expectation is that AXIS operating performance will continue to show measurable improvement.
AXIS continues to maintain levels of risk-adjusted capitalization that place its balance sheet strength in the strongest category. The groups balance sheet assessment also benefits from a favorable amount of financial flexibility and flexible capital within operating subsidiaries, but also reflects capital management strategies that have included consistent common and preferred dividends, as well as share repurchases.
AM Best views AXIS business profile as favorable and the group consistently ranks in the top half of AM Bests Global Reinsurance Top 50 while also maintaining a well-regarded profile as a specialty underwriter of complex risks. The groups ERM is sophisticated and embedded throughout the organization. AM Best believes that AXIS risk management is appropriate given its complex risk profile.
The FSR of A+ (Superior) and the Long-Term ICR of “aa-” have been affirmed with negative outlooks for the following subsidiaries of AXIS Capital Holdings Limited:
- AXIS Specialty Limited
- AXIS Re SE
- AXIS Reinsurance Company
- AXIS Specialty Europe SE
- AXIS Surplus Insurance Company
- AXIS Insurance Company
The following Long-Term IRs have been affirmed with negative outlooks:
AXIS Capital Holdings Limited
— bbb on $225 million 5.5% non-cumulative preferred shares, Series D
AXIS Specialty Finance LLC (guaranteed by AXIS Capital Holdings Limited)
— a- on $500 million 5.875% senior unsecured notes, due 2020
The following indicative Long-Term IRs under the current shelf registration have been affirmed with negative outlooks:
AXIS Capital Holdings Limited
— a- on senior unsecured debt
— bbb+ on subordinated debt
— bbb on preferred stock
This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.
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