Global ratings agency Fitch recently reported strong to very strong Insurer Financial Strength (IFS) ratings for Bermuda and U.S. insurers and reinsurers.
Arch received an ‘AA-’, RenaissanceRe an ‘A+’, and both SiriusPoint and Hamilton an ‘A–’, all with Stable Outlooks.
These high ratings are attributed to the companies’ solid capital positions, which were rated ‘Strong’ to ‘Extremely Strong’ as of year-end 2023, assessed by Fitch Ratings’ Prism Global capital model. Additionally, these re/insurers maintain low to moderate financial leverage ratios, ranging from 7% to 26%.
In 2023, Arch, Hamilton, RenaissanceRe, and SiriusPoint all improved their combined ratios due to reduced catastrophe losses and favourable underwriting market conditions. SiriusPoint, in particular, is expected to continue improving its operating results, which contributes to its positive financial performance and earnings outlook.
Arch’s ‘AA–’ rating is driven by favourable combined ratios and a high return on average equity (ROAE). Throughout its 22-year history, Arch has consistently reported underwriting and net income profits. The company also benefits from very low combined ratios in its mortgage segment, which recently saw substantial reserve releases due to favourable mortgage delinquency cure activity.
Fitch considers Arch’s company profile as ‘Favourable’, and Hamilton, RenaissanceRe and SiriusPoint as ‘Moderate’.
