AM Best has affirmed the Long-Term Issuer Credit Rating
(Long-Term ICR) of “a-” (Excellent) of W. R. Berkley Corporation
(W. R. Berkley) (Greenwich, CT) [NYSE: WRB] and all associated
Long-Term Issue Credit Ratings (Long-Term IRs) and indicative
Long-Term IRs for securities issued by W. R. Berkley. At the same
time, AM Best has affirmed the Financial Strength Rating (FSR) of
A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of Berkley
Insurance Company (Wilmington, DE) and its reinsured subsidiaries
and affiliates, collectively referred to as W. R. Berkley Insurance
Group (Berkley Group). AM Best also has affirmed the FSR of A+
(Superior) and the Long-Term ICR of “aa-” (Superior) of Berkley
Life and Health Insurance Company (Berkley Life and Health)
(Urbandale, IA). The outlook of these Credit Ratings (ratings) is
stable. (See below for a detailed list of the companies and
ratings).
Concurrently, AM Best has assigned an FSR of A+ (Superior) and a
Long-Term ICR of “aa-” (Superior) to W. R. Berkley’s newly
reinsured affiliate, Berkley Prestige Insurance Company (Urbandale,
IA). The outlook assigned to these ratings is stable.
The ratings of Berkley Group reflect its balance sheet strength,
which AM Best assesses as strongest, as well as its strong
operating performance, favorable business profile and appropriate
enterprise risk management (ERM).
Berkley Group’s balance sheet strength assessment is anchored by
its consistent strongest level of risk-adjusted capitalization, as
measured by Best’s Capital Adequacy Ratio (BCAR). The company
continues to demonstrate its ability to access capital markets as
necessary and has continued to be focused on creating enhanced
permanency of capital and lower cost of debt. Debt leverage has
trended downward over the past five-year period and was 21.5%,
adjusted as of year-end 2022. The group’s interest coverage and
liquidity metrics remain strong. Berkley Group effectively
maintains a diversified portfolio of investments to support its
liabilities and is focused on creating the most favorable return
while maintaining its risk tolerance levels.
The group continues to maintain favorable market share in its
core lines of business, as well as growth organically through new
businesses and opportunities. Berkley Group’s recognized presence
in domestic and international markets and its diversity of
distribution and operations are key factors in its favorable top
and bottom-line trends reported over the past five-year period. The
group’s historically consistent operating results and profitability
metrics point to nimble underwriting and pricing discipline, as
well as effective risk management expertise. Berkley Group reported
net premium growth across most of its core lines of business in the
first quarter of 2023, with GAAP return on equity of 17.4%. Berkley
Group’s effective ERM practices and risk modelling capabilities are
supportive of its current investment and operational risks as
demonstrated by the lack of volatility of financial results and
overall capitalization of the enterprise.
The ratings of Berkley Life and Health reflect its balance sheet
strength, which AM Best assesses as strongest, as well as its
adequate operating performance, neutral business profile and
appropriate ERM. The ratings also reflect the financial and
operational support of the parent company.
Berkley Life and Health’s balance sheet strength assessment is
supported by its risk-adjusted capitalization assessed at the
strongest level, as measured by BCAR. The company has strengthened
its risk-adjusted capitalization incrementally annually over the
past five years, while also maintaining conservative, high-quality
investments and favorable liquidity metrics.
Berkley Life and Health continues to grow premium driven by new
and renewal sales of its group captive and medical stop-loss
products. The company has reported increasing pre-tax net operating
gains in recent years driven by favorable underwriting experience
and lower expenses.
Berkley Life and Health is a market leader in the group captive
market and maintains a market niche in the small group medical
stop-loss space. However, the medical stop-loss market is highly
competitive and is dominated by larger national carriers. The
company receives explicit and implicit support from W. R. Berkley
and is integrated fully into the parent organization’s operations
and strategic plans.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-”
(Superior) have been affirmed with stable outlooks for the
following members of W. R. Berkley Insurance Group:
- Acadia Insurance Company
- Admiral Indemnity Company
- Admiral Insurance Company
- Berkley Casualty Company
- Berkley Assurance Company
- Berkley Insurance Company
- Berkley National Insurance Company
- Berkley Regional Insurance Company
- Berkley Specialty Insurance Company
- Carolina Casualty Insurance Company
- Clermont Insurance Company
- Continental Western Insurance Company
- Firemen’s Insurance Company of Washington, D.C.
- Gemini Insurance Company
- Great Divide Insurance Company
- Intrepid Casualty Company
- Intrepid Insurance Company
- Intrepid Specialty Insurance Company
- Key Risk Insurance Company
- Midwest Employers Casualty Company
- Nautilus Insurance Company
- Preferred Employers Insurance Company
- Queen’s Island Insurance Company, Ltd.
- Riverport Insurance Company
- StarNet Insurance Company
- Tri-State Insurance Company of Minnesota
- Union Insurance Company
- Union Standard Lloyds
- W. R. Berkley Europe AG
- Berkley International Seguros Mexico S.A.
- Berkley International Fianzas Mexico S.A.
The following Long-Term IRs have been affirmed with stable
outlooks:
W. R. Berkley Corporation— -- “a-” (Excellent) on $250 million,
6.25% senior unsecured notes, due 2037 -- “a-” (Excellent) on $350
million, 4.75% senior unsecured notes, due 2044 -- “a-” (Excellent)
on 470 million, 4.0% senior unsecured notes, due 2050 -- “a-”
(Excellent) on $400 million, 3.55% senior unsecured notes, due 2052
-- “a-” (Excellent) on $350 million, 3.15% senior unsecured notes,
due 2061 -- “bbb+” (Good) on $185 million, 5.7% subordinated
debentures, due 2058 -- “bbb+” (Good) on $300 million, 5.1%
subordinated debentures, due 2059 -- “bbb+” (Good) on $250 million,
4.25% subordinated debentures, due 2060 -- “bbb+” (Good) on $300
million, 4.125% subordinated debentures, due 2061
The following indicative Long-Term IRs under the shelf
registration have been affirmed with stable outlooks:
W. R. Berkley Corporation— -- “a-” (Excellent) on senior
unsecured debt -- “bbb+” (Good) on subordinated debt -- “bbb”
(Good) on preferred stock
W. R. Berkley Capital Trust III— -- “bbb” (Good) on preferred
securities
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 specializing 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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