Related Bermuda-domiciled companies have maintained strong and stable credit ratings, it has been announced.

AM Best has affirmed the financial strength rating of A- (excellent) and the long-term issuer credit rating of “a-” (excellent) of Harrington Re Ltd.

AM Best also has affirmed the long-term ICR of “bbb-” (good) of Harrington Reinsurance Holdings Limited.

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

Harrington, which commenced operations in 2016, is sponsored by Axis Capital Holdings Limited and The Blackstone Group Inc.

Harrington’s risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), was consistent with a strongest BCAR assessment. Prospectively, AM Best expects Harrington’s BCAR scores to remain supportive of the ratings.

The company employs an alternative asset strategy, which has resulted in significant exposure to market volatility. It is in the process of reallocating some of its liquid alternative assets towards more investment grade products, a strategy which should introduce greater stability in results.

Recent investment returns have been strong, as some of the company’s alternative investment strategies reach maturity.

Harrington continues to build out a diversified, multiline reinsurance book of business with a focus on medium to longer-tailed casualty lines. Their operating results have been mixed, reflecting challenges associated with being a start-up operation focused on casualty lines, which have been subject to social inflation.

Currently, Harrington does not directly face the market and business is sourced through cessions from Axis. Harrington has a developed risk management function and also benefits from expertise and systems from both its sponsors.