AM Best has revised the outlook to positive from stable for the long-term issuer credit rating and affirmed the financial strength rating of A (Excellent) and the long-term ICR of “a” (Excellent) of Bermudian-based Associated Electric & Gas Insurance Services.

The outlook of the FSR is stable.

The credit ratings reflect the company’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

AM Best said: “The positive long-term ICR outlook reflects Aegis’ positive earnings, which have been consistent even in years of large loss events for the industry, and throughout low interest-rate market conditions.

“Underwriting returns have been supported by appropriate premium rate increases and a meticulous review of accounts, while investment returns have been supported by a conservative, liquid strategy.

“Aegis focuses on risk diversification and capital preservation, which have been achieved through a successful combination of its energy mutual operations in the United States and uncorrelated lines of business with its Lloyd’s Syndicate 1225.”

The agency added: “Aegis continues to maintain the strongest level of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, supported by consistent surplus growth over the past ten years.

“Aegis’ historical focus on the US and Canadian utility industries and the diversification benefit from its Lloyd’s syndicate continues to stabilise underwriting performance.

“Management continues to focus on the company’s operating performance by improving its risk management strategies, including continued refinement of its underwriting criteria, as well as the prudent use of available reinsurance protection and modest limits.

“Aegis continues to have a high member retention ratio, an adaptive and highly responsive management team and continued expansion of programmes within its corporate mission.”