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Fitch affirms AXIS Capital rating, outlook remains negative

10th December 2020 - Author: Charlie Wood

Fitch Ratings has affirmed the ‘A+’ (Strong) Insurer Financial Strength (IFS) ratings of the operating subsidiaries of Bermuda-based re/insurer AXIS Capital.

Fitch-RatingsThe ratings agency has also affirmed AXIS’ ‘A-‘ Issuer Default Rating (IDR), while the rating outlook is negative.

Fitch says these ratings reflect the company’s moderate business profile, very strong capitalization and reasonable financial leverage.

These favorable factors are partially offset by earnings volatility from catastrophe loss events and modest fixed-charge coverage.

The negative outlook reflects recent results, which saw AXIS post a 9M20 combined ratio of 109.6%.

Fitch had originally assigned AXIS a negative outlook in May off of an analysis of the company’s fundamental trends and Fitch’s assessment of the impact of the coronavirus pandemic.

Fitch views AXIS’ business profile as “moderate” compared with all other US/Bermuda non-life re/insurance organisations.

This ranking aligns with Fitch’s ‘a+’ credit factor score and is considered to have a higher influence on the ratings.

The company is seen as having a broad product portfolio with sizable operations in both insurance and reinsurance segments that favorably provides diversified sources of revenues and earnings.

Fitch notes how AXIS’ financial leverage ratio (FLR) was reasonable at 20.9% as of Sept. 30, 2020, down from 25.1% at the end of 2019.

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