AM Best Affirms Credit Ratings of Lancashire Holdings Limited and Its Subsidiaries
October 07 2021 - 04:30PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR)
of “a+” (Excellent) of Lancashire Insurance Company Limited
(Hamilton, Bermuda) and Lancashire Insurance Company (UK) Limited
(United Kingdom) (collectively referred to as Lancashire).
Additionally, AM Best has affirmed the Long-Term ICR of “bbb+”
(Good) of the parent company, Lancashire Holdings Limited
(Lancashire Holdings) (Hamilton, Bermuda) [LSE: LRE]. The outlook
of these Credit Ratings (rating) is stable.
The ratings reflect Lancashire’s balance sheet strength, which
AM Best assesses as strongest, as well as its strong operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
Lancashire maintains the strongest levels of risk-adjusted
capitalization as measured by Best’s Capital Adequacy Ratio (BCAR).
In addition to the strongest level of risk-adjusted capitalization,
the assessment of balance sheet strength is supported by the
group’s financial flexibility and history of prudent reserving. The
group actively manages its capital and raised capital in 2020 to
take advantage of favorable market opportunities. Also reflected in
the ratings is Lancashire’s historically strong overall
performance, driven by underwriting results in non-catastrophe
affected years and complemented by investment income and fee
income. Lancashire maintains an elevated risk profile, as it writes
lines of business that have significant exposures to catastrophe
activity. Lancashire is a specialty underwriter with a good degree
of geographic and product line diversification, as the company’s
offerings include primary insurance, reinsurance and retrocessional
coverages written on a global basis through traditional capacity,
Lloyd’s and its Kinesis platform.
In terms of ERM, Lancashire’s risk management function is
embedded and customized across the entire organization, in line
with the group’s elevated risk profile. The group’s historically
strong underwriting results are demonstrative of its risk
management capabilities.
Rating factors that could lead to a negative rating action
include outsized insurance or investment losses, or a significant
decline in risk-adjusted capitalization that would not be
supportive of the current rating levels. A negative rating action
could also occur if the group experiences a sustained trend of
underwriting profitability results that are inconsistent with the
current operating performance assessment.
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 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.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Clare Finnegan Senior Financial Analyst +1 908
439 2200, ext. 5165 clare.finnegan@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Steven M. Chirico, CPA Director +1 908 439
2200, ext. 5087 steven.chirico@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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