Bermuda re/insurer Lancashire Holdings Ltd received a boost yesterday, when AM Best Co upgraded the financial strength rating of its operating companies to A from A-.Issuer credit ratings of Lancashire Insurance Company Ltd and Lancashire Insurance Company (UK) Ltd were also upgraded to “a” from “a-” .Additionally, Best has upgraded the ICR to “bbb” from “bbb-” and debt rating to bbb-” from “bb+” on $130.8 million 3.7 percent subordinated notes, due in 2035 of Lancashire Holdings Ltd. The outlook for all ratings has been revised to stable from positive.The rating upgrades reflect Lancashire’s excellent risk-adjusted capitalisation, very strong operating results since inception, experienced management team and the financial flexibility afforded to the group by the listing of Lancashire Holdings’ shares on the London Stock Exchange, Best said.Additionally, the ratings agency said that the ratings reflected the group’s very strong risk management framework, which has mandated its conservative operating strategies. This customised risk management framework has produced excellent underwriting results, which have enabled Lancashire to consistently generate return measures at the high end of its peer group, Best added.Partially offsetting these positive attributes, said Best, was the company’s exposure to low frequency, high severity events due to its targeted lines of business.The upgrades consider all of the aforementioned attributes in addition to Lancashire’s success by adhering to and executing on its initial business plan. The ratings agency said that the expectation was that the group will continue to produce favorable long-term operating results and maintain excellent risk-adjusted capitalisation commensurate with its ratings.