Fitch Ratings has assigned an 'AA-' (Very Strong) Insurer Financial Strength (IFS) rating to
The Rating Outlook is Stable.
Key Rating Drivers
Group IFS Rating Approach: The 'AA-' IFS rating assigned to AGRL reflects its status as a 'very important' operating company within the
Very Important to ACGL: AGRL's strategic importance is viewed as a 'Very Important' entity of ACGL based on shared board members and senior management, resources, common branding and reinsurance with the other ACGL operating entities. ACGL has the willingness and ability to provide support to AGRL. AGRL falls short of 'Core' strategic importance to ACGL due to its newness (established in 2022) and relatively small size (
Affiliated Bermuda Internal Reinsurer: AGRL was established to provide internal reinsurance covering certain
AGRL has thus far only completed its initial transaction, a loss portfolio transfer reinsurance agreement in 2022 for
RATING SENSITIVITIES
As a 'Very Important' subsidiary of ACGL, AGRL's rating sensitivities are consistent with ACGL's sensitivities below. However, if Fitch views AGRL's strategic importance to ACGL's primary insurance/reinsurance business as weakening to below 'Very Important', the group IFS rating methodology may no longer apply and could lead to a negative rating action/downgrade and/or rating withdrawal.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Improvement to a more favorable company profile, while producing very strong run-rate earnings with an insurance/reinsurance segments combined ratio in the high 80% range; successfully managing the USMI operations; and maintaining a Fitch Prism factor-based capital model score of 'Extremely Strong';
ACGL's holding company ratings could be upgraded if Fitch raised the company's combined primary insurance, reinsurance and mortgage operations 'a+' IFS group assessment; or if Fitch applied compressed IDR notching based on FLR maintained at or below 15% or fixed-charge coverage of over 12x.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Weakening in the overall assessment of capitalization and leverage, including net premiums written-to-equity ratio above 0.8x or an FLR above 20%, sizable adverse prior-year reserve development or fixed-charge coverage of below 10x; difficulties experienced in the USMI operations, such as reporting sustained GAAP underwriting losses;
The primary insurance and reinsurance 'AA-' IFS ratings could be downgraded if the group assessment IFS is lowered by one or more notches;
ACGL's holding company ratings could be downgraded if Fitch lowered the company's combined primary insurance, reinsurance and mortgage operations 'a+' IFS group assessment.
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information see www.fitchratings.com/esg.
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