A.M. Best Affirms Credit Ratings of Chubb Limited and Its Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” of the North American property/casualty subsidiaries of Chubb Limited (Zurich, Switzerland) [NYSE: CB], which include the members of the Chubb Bermuda Insurance Ltd. (Chubb Bermuda), Chubb Tempest Reinsurance Ltd. (Chubb Tempest Re) (both domiciled in Bermuda), the members of the ACE American Group, the members of the Chubb Group of Insurance Companies, Chubb Atlantic Indemnity Ltd., and Chubb Tempest Re’s parent, Chubb Tempest Life Reinsurance Ltd (CTLRE) (Bermuda). Concurrently, A.M. Best has affirmed the FSR of A++ (Superior) and the Long-Term ICR of “aa+” of Chubb European Group Limited (CEGL) (United Kingdom).

In addition, A.M. Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” of Combined Insurance Company of America (Chicago, IL) and Combined Life Insurance Company of New York (Latham, NY) (together known as the Combined companies). Additionally, A.M. Best has upgraded the Long-Term ICR to “a+” from “a” and affirmed the FSR of A (Excellent) of Chubb Seguros Panama S.A. (Chubb Panama) (Panama). The FSR of A- (Excellent) and the Long-Term ICR of “a-” of ACE Life Insurance Company (ACE Life) (Stamford, CT) also were affirmed.

Lastly, A.M. Best has affirmed the Long-Term ICRs of “a+” and the Long-Term Issue Credit Ratings (Long-Term IR) of Chubb Limited and Chubb INA Holdings Inc.

The outlook of these Credit Ratings (ratings) is stable. (Please see the link below for a detailed listing of the companies and ratings.)

The ratings of the core North American property/casualty subsidiaries, including Chubb Bermuda, Chubb Tempest Re, the Chubb Group of Insurance Companies, Chubb Atlantic Indemnity Ltd. and ACE American Group, reflect each company’s favorable risk-adjusted capitalization, excellent underwriting and overall operating performance and sustained competitive advantages within its geographically diversified standard and specialty commercial and high net worth personal insurance businesses. The ratings also recognize the companies’ comprehensive and embedded enterprise risk management, disciplined underwriting, strong franchise recognition and access to additional capital mechanisms provided by Chubb Limited.

These rating factors are partially offset by competitive market conditions, exposure to natural and man-made catastrophe losses and a modest level of historical adverse loss reserve development associated with its asbestos and environmental (A&E) liabilities. In addition, the companies remain exposed to below investment grade bonds, higher-than-average reinsurance recoverable balances and holding company demands.

The North American companies’ positive rating attributes are enhanced by their leading market position in the United States and in global markets. Their balance sheet strength is derived from consistent generation of underwriting profits, although underwriting profitability has been impacted by catastrophes, a modest uptick in A&E development and competitive market conditions, and a well-diversified book of business. Results also benefit from historically above-average total returns on invested assets and strong operating cash flow.

The North American subsidiaries’ strengths are derived from management’s successful operating strategies, which include consistent focus on underwriting profitability through careful risk selection and pricing, appropriate policy limits within the business model framework and the use of reinsurance to manage net retained exposures at a level appropriate for the group’s risk appetite. The subsidiaries’ experienced management team provides a disciplined underwriting approach and strong risk management capabilities through a comprehensive enterprise risk management program. The subsidiaries’ strong enterprise risk management program is demonstrated by the group’s ability to generate favorable income levels under challenging underwriting and investment conditions.

A.M. Best expects that the losses incurred by Chubb Limited following the recent catastrophic events, including Hurricanes Harvey, Irma and Maria and recent seismic activity in Mexico, will be contained within the organization’s risk tolerances. A.M. Best will continue to monitor the developments associated with these events and their impact on Chubb Limited. Should there be a material deviation from expectations, A.M. Best will update its assessment of Chubb Limited’s risk management capabilities and ratings.

Chubb Limited’s strong global capital position and proven financial flexibility, which, while somewhat diminished by the sizable level of intangible assets and increased debt associated with the 2016 purchase of the Chubb Corporation, continues to support its insurance operations through several capital-supporting mechanisms, including substantial capital contributions in prior years, internal reinsurance programs, utilization of repurchase agreements and the subsidiaries’ diverse and expanded market profile. Chubb Limited’s financial leverage and coverage measures remained strong through the second quarter of 2017.

The ratings of CTLRE reflect its ownership of Chubb Tempest Re, which accounts for the majority of the company’s financial profile, and the benefit of being part of the Chubb organization. Offsetting rating factors include its narrow stand-alone profile, its modest scale relative to its subsidiaries and affiliates and the elevated risk profile of its variable annuity reinsurance business.

The ratings of ACE Life reflect the benefits it receives as a member of the Chubb organization, and its adequate risk-adjusted capital position to support its risk profile. Offsetting rating factors include its limited business profile and statutory losses leading to declines in its absolute capital position over the past several years.

The ratings for the Combined companies reflect the benefits they receive as members of the Chubb organization, the trend of favorable revenue growth and their established niche in the middle-income market for supplemental individual accident and health products. Offsetting rating factors include recent volatility of earnings and capital and increasing credit risk of the investment portfolio.

The upgrade of Chubb Panama’s Long-Term ICR reflects its continued strong risk-adjusted capitalization, its diversified business profile, a solid reinsurance program placed with Chubb Tempest Re and the company’s affiliation to Chubb Limited, its ultimate parent. This affiliation provides Chubb Panama synergies and operating efficiencies. Offsetting these positive rating factors are Chubb Panama’s modest but growing market share within Panama’s insurance industry relative to the lines it writes, and the strong competitive environment in Panama’s insurance sector, which the company partially mitigates through a diversified business portfolio in other geographies.

The ratings of CEGL reflect its excellent stand-alone risk-adjusted capitalization, consistently strong operating performance and excellent business profile. The ratings also benefit from the support provided to CEGL by its parent company, Chubb Limited, and CEGL's importance within the Chubb group. CEGL continues to be of strategic significance to its ultimate parent company as its main underwriting operation in the United Kingdom and continental Europe. In addition, the company receives significant reinsurance support from Chubb group affiliates.

For a complete listing of Chubb’s FSRs, Long-Term ICRs and Long-Term IRs, please visit Chubb Limited.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171005005920/en/

A.M. Best

Darian Ryan, +1-908-439-2200 ext. 5449

Senior Financial Analyst—P/C

[email protected]

Christopher Sharkey, +1-908-439-2200 ext. 5159

Manager, Public Relations

[email protected]

Keith Behrmann, +1-908-439-2200 ext. 5733

Financial Analyst–L/H

[email protected]

Martina Seydoux, +44-20-7397-0308

Financial Analyst

[email protected]

Jim Peavy, +1-908-439-2200 ext. 5644

Director, Public Relations

[email protected]

Salvador Smith, +52-55-1102-2720 ext. 109

Associate Financial Analyst

[email protected]

Source: A.M. Best