AM Best confirms the credit ratings of Somers Re Ltd. and its affiliates – InsuranceNewsNet

OLDWICK, NJ–(BUSINESS WIRE)–
AM Best affirmed the financial strength rating of A- (Excellent) and the issuer’s long-term credit rating (long-term ICR) of “a-” (Excellent) of Somers Re Ltd. (Bermuda) and its subsidiaries: Watford Insurance Company Europe Limited (Gibraltar); Watford Insurance Company (New Jersey); Watford Specialist Insurance Company (New Jersey); and Axeria IARD (France). Additionally, AM Best confirmed the long-term ICR of “bbb-” (good) of Somers Group Holdings Ltd. (somers) (Bermuda), the group’s holding company. The outlook for these Credit Ratings (ratings) is stable.

The ratings reflect Somers’ balance sheet strength, which AM Best rates as very strong, as well as adequate operating performance, neutral business profile and appropriate enterprise risk management.

Somers had the highest level of risk-adjusted capitalization, as measured by Best’s credit adequacy ratio (BCAR), at the end of 2021. The group’s capitalization was affected by losses of placement not realized in 2022, but remains supportive of a very strong balance sheet strength valuation. The group’s five-year average operating returns have been volatile, and it has experienced significant swings in realized and unrealized gains and losses. However, Somers has been profitable in three of the last five years (2017-2021).

Somers has developed a global reinsurance and insurance platform. Business is primarily purchased and underwritten through contracts with Arch Capital Group Ltd. and its entities, which also provide essential functions for the company’s underwriting operations. Historically, the group has focused on low volatility, medium and long term lines of business; however, more recently the group has also diversified into more volatile short-term business sectors.

Negative rating actions could occur if the risk-adjusted capitalization deteriorates further beyond its current level or if the group’s liquidity is compromised. In addition, a significant deterioration in the group’s operating performance, including outsized investment portfolio losses or an underwriting loss that moves the group’s performance out of line with similarly rated peers, could put pressure down on ratings.

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Scores, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based at United Statesthe company does business in more than 100 countries with regional offices in London, amsterdam, dubai, hong kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Claire Finnegan
Senior Financial Analyst

+1 908 439 2200 ext. 5165

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Steven M. ChiricoCPA

Director

+1 908 439 2200 ext. 5087

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Christopher Sharkey
Manager, Public Relations

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Al Slavin
Communications Specialist

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Source: AM Best