Credit rating agency AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) and the Long-Term Issue Credit Ratings (Long-Term IR) on the unsecured debt and preferred equity of Canadian financial holding company, Fairfax Financial Holdings Limited.
Additionally, the company’s subsidiaries, Fairfax (US) Inc. (Delaware) and Zenith National Insurance Corp. (headquartered in Woodland Hills, CA), have also had their Long-Term ICRs upgraded to “a-” (Excellent) from “bbb+” (Good).
The pair are indirectly wholly owned downstream holding companies of Fairfax. The outlook of these ratings has been revised to stable from positive.
AM Best explained that Fairfax’s rating upgrades reflect its recently and prospectively improved earnings. In 2022, Fairfax deployed significant cash assets into higher-yielding fixed-income instruments, strengthening reliable streams of dividend and interest income.
The group’s underwriting performance drove record profits despite elevated catastrophe activity. These enhanced returns have allowed the group to grow its capital base and further expand its projected run-rate for operating earnings in future cycles.
On the same note, AM Best has upgraded the Financial Strength Rating (FSR) to A+ (Superior) from A (Excellent) and the Long-Term ICRs to “aa-” (Superior) from “a+” (Excellent) of the operating affiliates of Allied World Assurance Company Holdings, Ltd.’s, collectively referred to as Allied World.
The Long-Term ICRs have also been upgraded to “a-” (Excellent) from “bbb+” (Good) for Allied World Holdings and its downstream holding company, Allied World Assurance Company Holdings I, Ltd (Bermuda), with revised outlooks to stable from positive.
AM Best explains that the revised ratings reflect Allied World’s “strongest” balance sheet strength, strong operating performance, favourable business profile, and appropriate enterprise risk management.
Allied World’s ratings were revised by the revision of the operating performance assessment to strong from adequate. The firm has benefited from improved underwriting ratios, stronger streams of dividend and interest income in recent years.
AM Best commented, “Allied World’s solid recent and prospective underwriting results as reflective of sound cycle management strategies that have reduced volatility, while at the same time steadily increasing underwriting income.”
The foillowing subsidiaries of the group have had its FSR upgraded to A+ (Superior) from A (Excellent), and the Long-Term ICRs to “aa-” (Superior) from “a+” (Excellent), with the outlooks revised to stable from positive: Vantapro Specialty Insurance Company, Allied World Assurance Company, Ltd, Allied World Surplus Lines Insurance Company, Allied World Assurance Company (U.S.) Inc., Allied World National Assurance Company, Allied World Specialty Insurance Company, Allied World Insurance Company, and Allied World Assurance Company (Europe) Designated Activity Company.
