AM Best Co. has assigned a financial strength rating of A (excellent) and an issuer credit rating of “a” to Aspen American Insurance Company (AAIC), of Dallas, Texas, a wholly owned subsidiary of its Bermuda-based Aspen Insurance Holdings Ltd.

The outlook assigned to both ratings is stable.

Best said the ratings of AAIC largely reflect its role and strategic importance to Aspen’s overall US strategy and the explicit support provided through substantial quota share reinsurance of AAIC’s net business by its Bermuda-based affiliate, Aspen Insurance Ltd. (AIL). Additionally, AIL provides a guarantee of all of AAIC’s third-party reinsurance recoverables.

The ratings also reflect Best’s expectation concerning the company’s ability to successfully execute a business plan targeting specific, identified programs focused on certain niche classes of specialty admitted business.

These positive rating factors are offset by the considerable challenges and execution risk associated with a start-up company, especially one seeking to establish itself in the current specialty admitted marketplace..