A company related to Bermuda energy mutual, Everen, has maintained its strong credit ratings with AM Best.

The agency has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of excess general liability insurer Everen Specialty Ltd. of Hamilton, Bermuda, formally known as Oil Casualty Insurance, Ltd.

AM Best also has affirmed the long-term issuer credit rating of “bbb” (Good) on the $200 million, 8.00% deferrable subordinated debentures, due September 15, 2034. The outlook of these credit ratings is stable.

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

Best said: “Everen Specialty’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, is in the very strong range, though overall capital levels have been in decline over the past five years.

“Capitalisation has remained sufficient to support the company’s strategic diversification efforts. The company’s diversification efforts have supplemented its primary mission as a stable capacity provider for the energy industry.

“Everen Specialty’s underwriting performance has been volatile over the prior five years, as the company experiences occasional shock losses.

“However, the company does use retrocessional reinsurance and limit management cover to mitigate its exposures.

“Everen Specialty’s reinsurance programme has been proven effective in dampening volatility. Investment returns have been accretive to the company’s results in four of the past five years (2021 through 2017).

“The management team is seasoned, with its members having experience in the insurance, financial and energy industries.”

AM Best said it does not anticipate positive rating movement over the short term; diversification and growth initiatives will need to prove beneficial to the group’s operating performance over the intermediate term. Negative rating actions could result from continued reduction in Everen Specialty’s risk-adjusted capitalisation.