AM Best Affirms Credit Ratings of Assured Guaranty Re Overseas Ltd.
AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of "aa" of Assured Guaranty Re Overseas Ltd. (AGRO) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect AGRO's balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
AGRO's risk-adjusted capital, as measured by the Best Capital Adequacy Ratio (BCAR), is currently and projected by AM Best to be at the strongest level over the next three years. Shareholders' equity at AGRO has increased in the past few years, and further increases are expected in the near term. The company's strong liquidity position, conservative investment portfolio and financial flexibility due to its affiliation with Assured Guaranty Re Ltd., the indirect parent, and Assured Guaranty Ltd. (AGL (News - Alert)), the ultimate parent, as well as AGRO's active capital management using its internal capital model, provide support of the balance sheet assessment of strongest.
AGRO's operating performance is assessed as adequate based on its operating results, which have been driven primarily by investment income. An increase in expenses related to its target lines of business - aircraft residual value insurance and life financial reinsurance - has hampered AGRO's overall operating performance; however, AGRO forecasts faster revenue growth from its target lines of business versus more moderate expense growth.
AGRO's business profile is assessed as neutral, as its target lines of business exhibit risk profiles with low loss probability, with an attractive pricing environment and minial number of players. AGRO's overall ERM assessment is appropriate, as the company employs a robust ERM framework and infrastructure embedded across the AGL group of companies, of which AGRO is a member. AM Best considers AGRO's risk assessment capabilities to be aligned appropriately with its risk profile.
The ratings also take into consideration the benefits and support AGRO receives from the AGL group of companies - a broader, successful franchise - and its importance to AGL's overall business strategy and profile.
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.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.