A.M. Best Affirms Ratings of Argo Group International Holdings, Ltd. and Its Subsidiaries
A.M. Best Affirms Ratings of Argo Group International Holdings, Ltd. and Its Subsidiaries
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a" of Argo Re Ltd. (Argo Re) (Hamilton, Bermuda) and its subsidiaries. A.M. Best also has affirmed the ICR and debt ratings of "bbb" of the parent holding company, Argo Group International Holdings, Ltd. (Argo Group) (Hamilton, Bermuda) (NAS: AGII) . Concurrently, A.M. Best has affirmed the ICR of "bbb" and the debt rating of "bbb" on $143.75 million 6.5% senior unsecured notes due 2042 of Argo Group US, Inc. (Argo US) (San Antonio, TX). These senior notes are fully and unconditionally guaranteed by the Argo Group. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
The rating affirmations reflect Argo Re's solid overall capitalization, management's product expertise in niche focus areas, historically strong operating performance and favorable reserve development. The ratings also consider Argo Group's profitability in 2012 and in the first half of 2013, its conservative financial leverage (total debt-to-total capital) and the financial flexibility that Argo Re derives from Argo Group. Over the near term, A.M. Best expects that Argo Re's results should continue to be positively influenced by actions management has undertaken to reduce its worldwide property exposure and improve overall operational efficiencies.
Partially offsetting these positive rating factors is the execution risk associated with Argo Group's expansion into new territories such as Brazil. A.M. Best recognizes that management has been addressing this risk and that the integration of acquisitions and re-engineering of related businesses is complete. Management's ability to continue to execute on this strategy without significantly disrupting its current operations will be considered in A.M. Best's future rating evaluations. Additional offsetting rating factors include competitive pressures, low new money investment yields, the effects from weak economic conditions and Argo Group's elevated expense structure.
A.M. Best believes that Argo Re and its subsidiaries are well positioned at their current rating levels. Key drivers that could lead to downward rating movement include material deterioration in the organization's underwriting and/or operating performance, material adverse loss reserve development and/or a material decline in risk-adjusted capital.
The FSR of A (Excellent) and ICRs of "a" have been affirmed for Argo Re Ltd. and its following subsidiaries:
ArgoGlobal SE
Argonaut Great Central Insurance Company
Argonaut Insurance Company
Argonaut Limited Risk Insurance Company
Argonaut-Midwest Insurance Company
Argonaut-Southwest Insurance Company
Colony Insurance Company
Colony National Insurance Company
Colony Specialty Insurance Company
Rockwood Casualty Insurance Company
Select Markets Insurance Company
Somerset Casualty Insurance Company
The following indicative debt ratings available under various shelf registrations have been affirmed:
Argo Group International Holdings, Ltd.—
-- "bbb" on senior unsecured debt
-- "bbb-" on subordinated debt
-- "bb+" on preferred stock
Argo Group US, Inc.—
-- "bbb" on senior unsecured debt
-- "bbb-" on subordinated debt
Argo Group Statutory Trust—
-- "bb+" on preferred stock
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
A.M. Best Co.
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
joseph.roethel@ambest.com
or
Daniel J. Ryan, 908-439-2200, ext. 5325
Vice President
daniel.ryan@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
KEYWORDS: United States Europe North America New Jersey
INDUSTRY KEYWORDS:
The article A.M. Best Affirms Ratings of Argo Group International Holdings, Ltd. and Its Subsidiaries originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
