AM Best has upgraded the issuer credit ratings (ICRs) of Ascot Group’s operating subsidiaries to reflect their strategic importance to the parent company, which is forecast to achieve profitable growth over the medium term.
The rating agency upgraded the long-term ICR to “a+” (Excellent) from “a” (Excellent) and affirmed the financial strength rating (FSR) of A (Excellent) of Ascot Bermuda Limited (Ascot Bermuda) (Bermuda), as well as Ascot Insurance Company (AIC) and Ascot Specialty Insurance Company (ASIC).
The outlook of the long-term ICRs has been revised to stable from positive, whilst the outlook of the FSR is stable.
AM Best explained that the upgrade of the long-term ICRs reflects the group’s improved geographical and product diversification, achieved through its Bermudian operations and U.S. operations.
The rating of Ascot Bermuda and Ascot U.S. also reflect the consolidated balance sheet strength of Ascot Group Limited (Ascot), which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Additionally, analysts note that Ascot receives rating enhancement from its parent, Canada Pension Plan Investment Board (CPPIB), which is considered to be of superior financial strength and supportive of Ascot’s strategy.
What’s more, Ascot Bermuda is viewed to be strategically important to Ascot as a platform for growth in the Bermudian reinsurance market, and as an internal reinsurer.
Similarly, Ascot U.S. is viewed as strategically important for the group as a source for diversification and growth within the U.S.-admitted lines market, and is supported by a net worth maintenance agreement with Ascot.
Ascot is a property and specialty re/insurance group, with 2020 gross written premium (GWP) of $1.82 billion. The company reported profit of $150mn last year.
Previously, the group’s business was underwritten primarily via Lloyd’s Syndicate 1414 (Syndicate 1414), which is managed by Ascot Underwriting Limited, but the Bermudian and U.S. operations now contribute a sizeable portion of the group’s revenue.
Last month, Ascot announced the launch of a global reinsurance platform, called Ascot Re, which will operate as a single point of entry for all related reinsurance products and capabilities, under the leadership of Group Chief Underwriting Officer Mark Pepper.