AM Best Revises Outlooks to Negative and Affirms Credit Ratings of Aspen Insurance Holdings Limited and Its Rated Subsidiaries
The ratings of
The negative outlooks reflect pressure on Aspen’s operating performance assessment, following losses reported in the last three years, which have contributed to an erosion of capital. The group has taken remedial actions to improve performance, but these have had a limited impact on financial results to date. AM Best will continue to monitor the impact of these actions, and the improvement plan adopted by the new management team appointed in 2019, on the group’s underwriting results. Failure to improve operating performance could lead to further negative rating action.
In spite of the reduction in its capital base, the group’s risk-adjusted capitalisation has remained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), due to steps taken by the management to limit exposure to catastrophe losses and the adverse development of legacy business. In
Aspen’s recent operating performance has been below AM Best’s expectations due to the impact of catastrophe losses and weaker-than-expected results for certain lines of business, and demonstrated by a five-year weighted average combined ratio of 107.5% (2015-2019). In 2019, reserve strengthening on legacy business and one-off restructuring costs contributed to a net loss after tax of
Aspen’s business profile benefits from the company’s well-diversified portfolio of property/casualty and specialty insurance and reinsurance business, as well as a good geographical footprint. The group’s ERM is developed and aligned appropriately with its relatively high-risk profile.
The following Long-Term IRs have been affirmed, with the outlook revised to negative from stable:
Aspen Insurance Holdings Limited—
-- “bbb” on
-- “bb+” on
-- “bb+” on
-- “bb+” on
The following indicative Long-Term IRs under the universal shelf registration have been affirmed, with the outlook revised to negative from stable:
Aspen Insurance Holdings Limited—
-- “bbb” on senior unsecured debt
-- “bbb-” on senior subordinated debt
-- “bb+” on junior subordinated debt
-- “bb+” on preferred stock
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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Source: AM Best
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