--Issuer Default Rating (IDR) at 'A';
--Senior debt at 'A-'.
Fitch has also affirmed the 'A+' Insurer Financial Strength (IFS) ratings of
The Rating Outlook is Stable.
KEY RATING DRIVERS
Fitch's affirmation of
Fitch believes that
The company generates the vast majority of its earned premium through primary commercial liability lines business, both U.S. and international, with commercial reinsurance business representing approximately one third of the company's premium allocation.
Key rating triggers that could result in a downgrade include a material loss of capital, calendar-year combined ratio that exceeds 100%, continued growth in premiums considerably greater than peers, significant adverse reserve development, increases in underwriting leverage above a 1.0x net written premiums-to-equity ratio, financial leverage increasing above 25%, and catastrophe loss experience that greatly exceeds the company's probable maximum loss estimates.
While a near-term upgrade in ratings is unlikely, key rating triggers that could generate longer term upward rating pressure include continued favorable underwriting results in line with higher rated property/casualty (re)insurer peers; material improvement in key financial metrics (e.g. net premiums written to equity) to more overcapitalized levels; and enhanced competitive positioning while maintaining strong profitability with low earnings volatility.
Fitch affirms the following ratings with a Stable Outlook:
Allied World Assurance Company Holdings, Ltd.
--IDR at 'A';
--IFS at 'A+'.
Additional information is available at 'www.fitchratings.com'. The issuer did not participate in the rating process other than through the medium of its public disclosure.
--'Insurance Rating Methodology' (
Insurance Rating Methodology
Source: Fitch Ratings
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