AM Best Affirms Credit Ratings of AXIS Capital Holdings Limited and Its Operating Subsidiaries

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of the operating subsidiaries of AXIS Capital Holdings Limited (Pembroke, Bermuda), collectively referred to as AXIS. Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and the indicative Long-Term Issue Credit Ratings (Long-Term IR) of AXIS Capital Holdings Limited. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of subsidiaries and indicative Long-Term IRs.)

The ratings reflect AXIS’ balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM) from the group’s risk profile.

AXIS maintains the strongest levels of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which places its balance sheet strength in the strongest category. The group’s balance sheet strength assessment is supported by financial flexibility at the holding company level and within the operating subsidiaries, while also reflecting capital management strategies that have included consistent common and preferred dividends, as well as share repurchases. During late 2023, Axis strengthened reserves on its casualty book after having evaluated and reviewed claims for accident years 2017 to 2022. Claims experiences for these years were impacted by unanticipated higher social and economic inflation. However, prior to 2023, Axis had reported favorable reserve development for about nine of the past 10 years, testament to the company’s reserving controls efficiency. Financial leverage is elevated when compared with its peers but remains largely in line with the company’s expectations.

AXIS’ operating performance is assessed as adequate, as its underwriting results over the recent five-year period have been volatile. However, corrective measures implemented over the past two years to mitigate volatility such as exiting the property-catastrophe reinsurance business has resulted in more-stable earnings. These changes have favorably impacted profitably measures with the group’s loss and combined ratios improving significantly.

AM Best assesses AXIS’ business profile as favorable, with the group consistently ranking in AM Best’s Global Reinsurance 50 largest reinsurance enterprises, and in AM Best’s excess and surplus ranking. Despite some recent changes to its business mix, the group still retains a well-diversified profile as a specialty underwriter of complex risks with a significant presence in the Lloyd’s market. The group’s ERM is sophisticated and embedded throughout the organization. AM Best believes that AXIS’ risk management is appropriate given its complex risk profile.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following subsidiaries of AXIS Capital Holdings Limited:

• AXIS Specialty Limited
• AXIS Re SE
• AXIS Reinsurance Company
• AXIS Specialty Europe SE
• AXIS Surplus Insurance Company
• AXIS Insurance Company

The following indicative Long-Term IRs under the current shelf registration have been affirmed with stable outlooks:

AXIS Capital Holdings Limited—

-- “bbb+” (Good) on senior unsecured debt

-- “bbb” (Good) on subordinated debt

-- “bbb-” (Good) on preferred stock

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 pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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