AM Best has revised outlooks to positive for W.R. Berkley Corporation and its subsidiaries, which reflects its strong balance sheet and operating performance.
The Long-Term Issuer Credit Rating (Long-Term ICR) and Long-Term Issue Ratings (Long-Term IRs) of W. R. Berkley Corporation have been affirmed to positive from stable, as well as all associated Long-Term IRs and indicative Long-Term IRs for securities issued by W. R. Berkley.
At the same time, AM Best has revised the outlooks to positive from stable for the Long-Term ICRs and affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of Berkley Insurance Company and its pooled or reinsured subsidiaries and affiliates, which are collectively referred to as Berkley Group.
The rating agency has also revised the outlook to positive from stable for the Long-Term ICR and affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) of Berkley Life and Health. The outlook of the FSR is stable.
AM Best has assessed Berkley Group’s balance sheet as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management (ERM). The Group’s ratings reflect these strong facts.
The agency added: “The Long-Term ICR outlook revision to positive from stable reflects Berkley Group’s favourable operating performance metrics and its outperformance of industry trends over the most recent five-year period. Berkley Group continues to generate strong double-digit returns and has reported record top- and bottom-line growth in each of the past few years.
“In the first quarter of 2024, Berkley Group reported net premium growth across its core lines of business, with GAAP return on equity of 23.7%. AM Best expects that the group will continue to produce favorable results while growing its core businesses, as well as outperforming industry benchmarks and its peers on a long-term basis.”
Berkley Group’s balance sheet strength assessment is anchored by its consistent strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), the agency noted.
The Group’s debt leverage has trended downward in the past five-year period and was 20.8%, adjusted as of year-end 2023, and its interest coverage and liquidity metrics remain strong.
Its diversified portfolio of investments is well maintained to support the company’s liabilities, and is focused on creating the most favourable return while maintaining its risk tolerance levels, AM Best also pointed out.
The rating agency also stated that the ratings of Berkley Life and Health reflect its balance sheet strength, which are assessed as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The ratings also reflect the financial and operational support of the parent company.
