AM Best has affirmed the credit ratings of Bermudian-based Aspen Insurance Holdings Ltd and its rated subsidiaries.

The ratings agency affirmed the financial strength ratings of A (Excellent) and the long-term issuer credit ratings of “a” (Excellent) of Aspen Insurance UK Ltd, Aspen Bermuda Ltd, Aspen American Insurance Company of Austin, Texas and Aspen Specialty Insurance Company of Bismarck, North Dakota.

Concurrently, AM Best has affirmed the long-term ICR of “bbb” (Good) of Aspen Insurance Holdings, a non-operating holding company.

AM Best also has affirmed the long-term issue credit ratings on the preference shares of Aspen, and the indicative long-term IRs under the company’s universal shelf registration.

The outlook of these credit ratings is stable.

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

The ratings of AIUK, ABL, AAIC and ASIC reflect their integration and strategic importance to Aspen, the agency said.

AM Best said Aspen’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s capital adequacy ratio.

The agency said: "After declining in 2022 following some unrealised losses in the group’s investment portfolio, BCAR scores recovered at year-end 2023 supported by solid internal capital generation.

"Risk-adjusted capitalisation is expected to remain comfortably above the minimum required for the strongest level prospectively.

"The assessment considers the group’s conservative reserving approach since the takeover by Apollo Global Management Inc, while a loss portfolio transfer provides protection against adverse reserve development for business written up to 2019."

AM Best added: "Aspen reported positive underwriting performance for a second consecutive year in 2023, achieving a combined ratio of 92.1 per cent (as calculated by AM Best).

"The result followed years of historical underwriting underperformance, as evidenced by a five-year (2019-2023) weighted average combined ratio of 102.7 per cent (as calculated by AM Best).

"Prospective operating performance is expected to remain adequate over the underwriting cycle, supported by actions taken by management to improve technical profitability and good investment results.

"Aspen’s business profile benefits from its well-diversified portfolio of property/casualty and specialty insurance and reinsurance businesses, as well as a good geographic footprint.

"The group has a good franchise, supported by its diverse underwriting platforms in the United Kingdom, the United States and Bermuda, that enable Aspen to accommodate its clients’ needs."