OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Besthas affirmed the financial strength rating of A
(Excellent) and the issuer credit ratings (ICR) of “a” of Ironshore
Insurance Ltd.(Bermuda) and its affiliated operating companies: Ironshore
Indemnity Inc.(Minneapolis, MN), Ironshore Specialty
Insurance Company(Phoenix, AZ) and Ironshore Europe Limited
(Ireland) (collectively referred to as Ironshore). Concurrently, A.M.
Best has affirmed the ICR of “bbb” of Ironshore Inc. (Cayman
Islands). The outlook for all ratings is stable.
The rating affirmations reflect Ironshore’s strong risk-adjusted
capitalization, enhanced business profile as a specialty casualty
underwriter and highly experienced management team. The organization
continues to make solid development regarding the build-out and
transformation of its franchise. In recent years, Ironshore has
transformed its book of business to develop a select portfolio of global
specialty risks. In addition, Ironshore continues to attract highly
qualified insurance professionals with established business
relationships to add depth to the organization. Qualitatively, this
should prospectively solidify its position as a leading market for risk
managers and major brokers in specialty insurance classes.
These strengths are partially offset by Ironshore’s limited operating
history and significant growth in medium-tail casualty classes of
business during a soft phase of the casualty market. In A.M. Best’s
opinion, this growth exposes the company to greater reserve risk due to
the uncertainty associated with measuring ultimate loss costs for those
longer-tailed classes of business. However, these concerns are somewhat
mitigated by the extensive work that Ironshore has done with regard to
establishing a rigorous framework for pricing and reserve adequacy. In
determining the current ratings, A.M. Best recognizes the greater risk
of unfavorable reserve development through the assessment of
risk-adjusted capital tests performed, which provides a capital cushion
for potential reserve deficiency.
Accordingly, rating factors that could lead to rating downgrades for
Ironshore or a revision of the outlook to negative include unfavorable
operating profitability trends, outsized catastrophe or investment
losses relative to expectations and peers, significant adverse loss
reserve development or a material decline in risk-adjusted capital.
Alternatively, factors that could lead to rating upgrades include
sustained favorable operating profitability, coupled with maintenance of
strong risk-adjusted capital levels.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS
Greg Reisner,908-439-2200, ext. 5224
Senior Financial Analyst
DeRose, 908-439-2200, ext. 5453
Sharkey, 908-439-2200, ext. 5159
Peavy, 908-439-2200, ext. 5644
President, Public Relations
Source: A.M. Best Company, Inc.