Endurance, with SOMPO as New Owner, Gets A.M. Best Ratings Upgrade

March 31, 2017

Endurance Specialty Holdings Ltd. got a financial ratings upgrade from A.M. Best and is no longer under review, based on positives the ratings agency sees after it was acquired by Japan’s SOMPO Holdings Inc. for $6.3 billion.

A.M. Best upgraded the financial strength rating to “A+ (Superior)” from “A (Excellent)” and the long-term issuer credit ratings to “aa-” from “a” for Endurance Specialty Insurance and its subsidiaries. Also, it upgraded the long-term issuer credit ratings to “a-” from “bbb” and the long-term issuer credit ratings of corporate parent Endurance Specialty Holdings Ltd.

Those credit ratings also have a stable outlook, and A.M. Best removed Endurance and its subsidiaries from under review with positive implications.

“The rating actions reflect the operational benefits that Endurance will derive from being a significant operation within a larger organization with deep financial resources,” A.M. Best said. “As part of SOMPO, Endurance will have more scale to help advance its book of business.”

A.M. Best added that SOMPO will give Endurance significant financial support through a net-worth maintenance agreement. Also, the ratings agency was happy that Endurance will keep its executive leadership team, post-acquisition.

Another plus: A.M. Best noted that Endurance will take on SOMPO’s name and identity, and that a new holding company — SOMPO International Holdings Ltd. — will handle subsequent business.

Standard & Poor’s was similarly optimistic in October, particularly with news that Endurance would keep its existing executives. At the time, S&P affirmed its ratings for Endurance and its subsidiaries.

Standard & Poor’s affirmed its “BBB+” long-term counterparty credit rating for Endurance, and its “A” counterparty credit and financial strength ratings for the insurer’s core operating subsidiaries. It also maintained a stable outlook.

Source: A.M. Best

This article first appeared in Insurance Journal’s sister publication, Carrier Management.

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