A.M. Best Co. released a comment on the financial strength ratings of Aspen Insurance UK Limited (Aspen Re) and Aspen Insurance Limited (AIL) following the announcement by its ultimate parent, Aspen Insurance Holdings, Bermuda (AIH), of the commencement of operations of its new U.S. based subsidiary, Aspen Specialty Insurance Company. (See related article in “National”)
Best indicated that “the A (Excellent) rating of Aspen Re and the A- (Excellent) rating of AIL remain unchanged,” and that the outlook for both ratings remains stable.
“The current ratings continue to reflect each company’s stand-alone prospective risk-adjusted capital position,” said the bulletin. Best said it has analyzed the impact of the credit facility used by the holding company (AIH) to increase the capital of Aspen Specialty to $100 million and “is satisfied that debt leverage and interest coverage levels remain adequate. A.M. Best has given no equity credit for this additional capital within AIH.”
It also noted that “Aspen Specialty is expected to cede approximately 25% of its business (approximately USD 40 million of premium income) to AIL in 2004. This has been included in A.M. Best’s projections for AIL’s risk-adjusted capitalisation, which remains excellent through 2004.”
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