AM Best Upgrades Issuer Credit Ratings for Beazley plc’s Subsidiaries
18 Julio 2024 - 10:34AM
Business Wire
AM Best has upgraded the Long-Term Issuer Credit Ratings
(Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and
affirmed the Financial Strength Ratings (FSR) of A (Excellent) of
Beazley Insurance Designated Activity Company (BIDAC) (Ireland),
Beazley Insurance Company, Inc. (BICI) (Farmington, CT), Beazley
America Insurance Company, Inc. (Beazley America) (Farmington, CT)
and Beazley Excess and Surplus Insurance, Inc. (BESI) (Farmington,
CT). The outlook of the Long-Term ICR has been revised to stable
from positive while the outlook of the FSR is stable.
The Credit Ratings (ratings) of BIDAC, BICI, Beazley America and
BESI reflect the consolidated balance sheet strength of Beazley plc
(Beazley) [LSE: BEZ], which AM Best assesses as very strong, as
well as the group’s strong operating performance, neutral business
profile and appropriate enterprise risk management.
The upgrade of the Long-Term ICRs reflects AM Best’s expectation
that Beazley’s risk-adjusted capitalisation will remain comfortably
at the strongest level, as measured by Best’s Capital Adequacy
Ratio (BCAR). In recent years, the group has maintained robust
capital buffers and strong technical performance whilst growing its
insurance portfolio, supported by prudent risk selection and
effective cross-cycle underwriting management.
BIDAC, BICI, Beazley America and BESI are strategically
important to and integrated with Beazley. These four companies are
owned ultimately by Beazley, which is the non-operating holding
company and consolidating rating unit for the group.
BIDAC, which is the group’s main regulated operating entity in
the European Union, reinsures 65% of the profit or loss of the
distribution of Lloyd’s Syndicate 2623 and Lloyd’s Syndicate 3623
to Beazley’s Lloyd’s corporate member (after a deductible), and
also provides an internal reinsurance quota share to BESI. BICI and
Beazley America are Beazley’s admitted carriers, whereas BESI is an
excess and surplus writer in the United States.
Beazley’s balance sheet strength is underpinned by its strongest
level of risk-adjusted capitalisation, as measured by BCAR, as well
as the group’s prudent reserving, good financial flexibility and
strong liquidity. Beazley’s balance sheet strength is supported by
its conservative investment strategy, although the group maintains
a moderate allocation to higher-yield instruments.
Beazley has a track record of strong operating performance
supported by robust underwriting results and steady investment
income. In 2023, under IFRS 17, Beazley generated a net-net
combined ratio of 79.5% (as calculated by AM Best), driven by a
relatively low catastrophe loss incidence in the period and
prior-year reserve releases across most lines of business. This was
further supported by Beazley’s solid investment income, which
reflected the improved interest rates environment during the
period. Overall, the group reported net income of USD 1.0 billion
in 2023. Whilst Beazley’s earnings remain exposed to possible
volatility relating to potential catastrophe losses in the property
and cyber books of business, AM Best expects the group’s overall
performance to remain strong, supported by its selective
underwriting strategy and conservative investment allocation.
Beazley has a well-established profile, with a strong franchise
as an internationally recognised insurance group operating
principally at Lloyd’s. The group’s insurance written premiums
reached USD 5.6 billion in 2023 and are expected to continue
growing in the medium term. During the first quarter of 2024,
premiums increased by 7% compared with the same prior year period,
driven largely by growth in the property and specialty lines of
business.
This press release relates to Credit Ratings that have been
published on AM Best’s 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 Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Todor Kitin Senior Financial Analyst +44 20
7397 0335 todor.kitin@ambest.com
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