AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Canopius US and Canopius Re, wholly owned subsidiaries of Canopius Group.
According to AM Best, the ratings reflect Canopius’ balance sheet strength, which it assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
“The ratings of Canopius US and Canopius Re reflect their strategic importance to and integration within the Canopius group,” The rating agency added.
AM Best continued, “The revision of the outlooks to stable from negative reflects an improvement in Canopius’ risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to have recovered to the strongest level as at year-end 2023, up from the strong level as at year-end 2022. Risk-adjusted capitalisation is expected to stabilise at a similar level.”
AM Best also noted that Canopius’ underwriting results “showed continuing recovery” in 2022, after underperforming during the period 2017-2020.
The rating agency expects the group to report good underwriting and investment performance for 2023.
“Prospectively, Canopius is expected to deliver solid operating profitability, benefitting from the actions management has taken over recent years to reduce exposure to natural catastrophe events, as well as a strong rating environment,” AM Best explained.
The firm concluded, “Canopius has a well-established business profile as a (re)insurer in the Lloyd’s market, although it is subject to a strong level of competition.”
