Argus Group’s ratings have been upgraded by AM Best.

In a statement, AM Best said the upgrades reflect Argus Group’s improved balance sheet strength and consistent favourable operating performance

The agency has upgraded Argus Group’s financial strength rating to A- (excellent) from B++ (good), while the long-term issuer credit rating went from “bbb+” to “a-” for its subsidiaries Argus Insurance Company Ltd and Bermuda Life Insurance Company Ltd.

At the same time, the agency has upgraded Argus Group’s long-term issuer credit rating from “bbb-” to “bb+”, while the outlook for the ratings has been changed from positive to stable.

Alison Hill, chief executive officer of the Argus Group, said: “AM Best has recognised the improved strength of our balance sheet and improved quality of invested assets. Furthermore, we are delighted that AM Best has recognised the strength of our health and property lines of business.

“The credit rating upgrade is a testament to the hard work of Argus management and staff, and reflects our business approach, which is designed to deliver long term sustainable shareholder value.”

In a statement, AM Best said: “Over the past several years, the company successfully de-risked its balance sheet with an improved quality of invested assets achieved via reduced exposure to Bermuda-based equities, underperforming mortgages, as well as lower intercompany receivables at the insurance entities.

“In addition, favourable earnings in health and property lines of business contribute to capital retention. As a result, the company’s risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, is very strong. The good capital position is somewhat lessened by ongoing shareholders’ dividends and occasional capital returned to the holding company.”

The agency noted that Argus Insurance’s employee benefits segment adds diversification and favourably contributes to net operating earnings.

While an increase in health claims experience may pressure earnings over the near-term, AM Best expects Argus Insurance’s results to remain profitable.