AM Best has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a+" of Arch Reinsurance Ltd. (Arch) (Bermuda) and its reinsured affiliates.

The rating agency said the company's track record put it "among the leaders in the Bermuda market".

The outlook for all ratings is stable.

In its commentary on the rating decision, Best said: "The affirmation of the ratings reflects Arch's strong operating performance, consistently excellent capitalisation and demonstrated risk management.

"Arch maintains a strong underwriting culture and its overall underwriting performance continues to place it among the leaders in the Bermuda market."

Best said Arch focused on managing the underwriting cycle and adapted its overall book of business to optimise profit potential and limit exposure.

"Furthermore, Arch maintains a prudent investment portfolio that does not place excessive risk on the asset side of the balance sheet," Best said.

"Partially offsetting these positive rating attributes will be Arch's ability to maintain its underwriting discipline within its chosen markets given the current soft market conditions.

"In addition, as an underwriter of medium to long-tail casualty businesses, Arch needs to be cognisant of exposure to potential inflationary pressures."