A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of Endurance Specialty Insurance Ltd. and its affiliates. Best also affirmed the ICR of “bbb” and debt ratings of the publicly traded parent company, Endurance Specialty Holdings, Ltd.
The outlook for all ratings is stable. All of the above companies are domiciled in Bermuda.
The ratings reflect Endurance’s “strong level of risk-adjusted capitalization, solid historical operating performance over the last few years and its specialty focused, diversified business profile,” said Best. “Over the last few years, Endurance has repositioned its book of business by reducing reinsurance premiums, reducing its exposure to workers’ compensation business and targeting agriculture insurance.”
Best also noted that a “substantial portion of Endurance’s current specialty portfolio is agriculture insurance, which is not linked to the property/casualty pricing cycle. In addition, the ratings reflect the group’s solid enterprise risk management framework that has been continually enhanced in recent years, which should help support the organization’s balanced risk taking and limit outsized losses.”
As partial offsetting factors best cited “Endurance’s exposure to large severe events and the potential for events in excess of modeled expectations. In addition, Endurance, as well as the market, is challenged with managing this soft stage of the underwriting cycle and uneasy financial markets.”
The stable outlook reflects Best’s expectation that “operating performance and risk-adjusted capitalization will continue to support the ratings at the current level, given Endurance’s business strategy and solid risk management framework.
Best summarized the ratings affected as follows:
The FSR of ‘A’ (Excellent) and ICRs of “a” have been affirmed for Endurance Specialty Insurance Ltd and its following affiliates:
— Endurance Reinsurance Corporation of America
— Endurance Worldwide Insurance Limited
— Endurance American Specialty Insurance Company
— Endurance American Insurance Company
— Endurance Risk Solutions Assurance Company
— American Agri-Business Insurance Company
The following debt ratings have been affirmed:
Endurance Specialty Holdings, Ltd—
— “bbb” on $335 million 7.0 percent senior unsecured notes, due 2034
— “bbb” on $200 million 6.15 percent senior unsecured notes, due 2015
— “bb+” on $8 million 7.75 percent Series A non-cumulative preferred shares
The following indicative shelf ratings have been affirmed for debt securities available under the existing shelf registration:
Endurance Specialty Holdings, Ltd—
— “bbb” on senior unsecured debt
— “bbb-“on subordinated debt
— “bb+” on preferred stock
Endurance Holdings Capital Trust I & II (guaranteed by Endurance Specialty Holdings, Ltd)—
— “bb+” on preferred securities
Source: A.M. Best
Topics Excess Surplus Agribusiness
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