AM Best has affirmed the credit ratings for Bermuda-based Lancashire Holdings Limited and its subsidiaries, assigning a stable outlook.
The agency affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) of Lancashire Insurance Company Limited 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 (Hamilton, Bermuda) .
The ratings reflect Lancashire’s balance sheet strength, assessed as strongest by AM Best, as well as their robust operating performance, neutral business profile, and appropriate enterprise risk management (ERM) contribute to these ratings.
AM Best also noted that Lancashire continues to maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).
Lancashire has solid capital levels, assessed “strongest” by AM Best’s BCAR metric. Excess capital is actively managed and returned to shareholders.
Additionally, its financial flexibility, including the ability to raise additional capital, provides a buffer for continued growth, the agency noted.
AM Best analysts added: “Furthermore, initial reserves have consistently proved prudent, with releases over the years. Also reflected in the ratings is Lancashire’s historically strong overall operating performance, driven by underwriting results and complemented by investment and fee incomes.
“Combined ratios have improved over the last five years when compared to its peers, along with top line growth. This positive trend has benefited from benign catastrophic years and from the diversification of Lancashire’s lines of business, which have dampened volatility.”
