14 April 2014 Insurance

AM Best upgrades ACE subsidiaries

AM Best has upgraded the financial strength ratings of a number of subsidiaries of ACE to A++ from A+.

The divisions affected include its North American property/casualty subsidiaries, ACE Bermuda Insurance, ACE Tempest Reinsurance, the members of the ACE American Pool, ACE INA Insurance (Canada) and ACE Tempest Re's parent, ACE Tempest Life Reinsurance.

Additionally, A.M. Best has upgraded the  issuer credit ratings and senior debt ratings of ACE and its wholly owned downstream holding company, ACE INA Holdings, to ‘a+’ from ‘a’.

The rating agency said that the upgrades reflect the subsidiaries’ strong risk-adjusted capitalisation, diversified global operation enhanced by prudent acquisitions over the past few years and the historically favourable record of generating strong earnings and cash flows.

It also mentioned the management's experience and consistent focus on underwriting profitability generated by effective risk selection and pricing standards, and maintenance of appropriate policy limits and exposure to catastrophes, including the use of reinsurance to manage net retentions.

“ACE's strong enterprise risk management (ERM) programme relies on close collaboration of executives and operating departments to identify, assess and control enterprise risk and accumulations,” the rating agency said.

“The effectiveness of the ERM programme is demonstrated by risk-adjusted capital levels and overall earnings that have remained strong and consistent through soft market conditions, the global financial crisis and the increase in global catastrophe and weather-related events.”

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