AM Best has put Aspen Insurance Holdings on negative outlook...
AM Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Aspen Insurance Limited (AIL). The outlook for both ratings remains stable. It has also affirmed the financial strength rating of A (Excellent) and the issuer credit rating (ICR) of “a” of Aspen Insurance UK (AIUK).
The rating agency has also affirmed the ICR of “bbb” of AIUK's ultimate parent, Aspen Insurance Holdings (AHL), the debt rating of “bbb” on the $250m 6% senior notes and the “bb” on the $200m perpetual non-cumulative preference shares issued by AHL. The outlook on all these ratings is negative.
The negative outlook reflects Best's view that AHL's consolidated profitability remains subject to significant volatility derived from its substantial property catastrophe account. While risk management changes have reduced this volatility, a longer monitoring period is required before AM Best can clearly establish that more stable results and risk-adjusted capitalisation will result from these measures.
Best believes AIL's risk-adjusted capitalisation is likely to remain excellent at year-end 2006, benefiting from an anticipated 100% retention of earnings of approximately $160m-170m. Whilst these anticipated earnings reflect the benign hurricane season experienced in 2006, the agency's assessment of AIL's risk-adjusted capitalisation continues to factor potential volatility in earnings due to its substantial property catastrophe account.
