AM Best has upgraded the credit ratings of Ardellis Insurance Ltd, the Bermudian-based Class 3A insurer.

The agency has upgraded the company’s financial strength rating to A (Excellent) from A- (Excellent) and the long-term issuer credit rating to “a” (Excellent) from “a-” (Excellent).

The outlook of these credit ratings has been revised to stable from positive.

These ratings reflect Ardellis’ balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

Ardellis’ ultimate parent is UFP Industries Inc.

Ardellis provides reimbursement coverage for workers’ compensation, medical stop-loss, general liability, auto liability, auto physical damage, property and trade receivable to its parent.

In addition, Ardellis assumes medical stop-loss exposure from third parties.

In several of the last five years, Ardellis experienced rapid growth in third party business; however, this growth has substantially moderated and currently the third party medical stop-loss business represents approximately half of the company’s premiums.

AM Best said the rating upgrades reflect Ardellis’ strong operating performance, with loss and expense ratio metrics consistently outperforming the general property/casualty industry.

Ardellis’ low expense ratios reflect the company’s low overhead and its favourable loss ratios are attributable to its conservative underwriting philosophy and expertise.

Further, the company’s loss control programme and safety practices have resulted in both the affiliated and third party business remaining profitable over consecutive years.

Ardellis’ balance sheet strength remains very strong, supported by the strongest level of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio.

AM Best considers the company’s ERM framework and risk management capabilities appropriate for its risk profile.

Further, Ardellis benefits from being an integral part of its ultimate parent’s ERM framework.