A.M. Best has affirmed the Financial Strength Rating of A+
(Superior) and the Long-Term Issuer Credit Rating of “aa” of Assured
Guaranty Re Overseas Ltd. (AGRO) (Bermuda). The outlook of these
Credit Ratings (ratings) is stable.
The ratings reflect AGRO’s balance sheet strength, which A.M. Best
categorizes as strongest, as well as its adequate operating performance,
neutral business profile and appropriate enterprise risk management.
AGRO’s risk-adjusted capital, as measured by the Best Capital Adequacy
Ratio (BCAR), is currently and is projected to be at the strongest level
over the next one to three years. Shareholders’ equity at AGRO has
increased in the past few years, and further increases are expected in
the near term. The company’s strong liquidity position, conservative
investment portfolio and financial flexibility due to its affiliation
with Assured Guaranty Re Ltd. (AG Re), the indirect parent, and Assured
Guaranty Ltd. (AGL), the ultimate parent, as well as AGRO’s active
capital management using its internal capital model, provide support of
the balance sheet assessment of strongest.
AGRO’s operating performance is assessed as adequate based on positive
operating results that have been driven primarily by investment income
and the performance of its various lines of business. An increase in
expenses related to its target lines of business has hampered AGRO’s
overall operating performance; however, AGRO forecasts its target lines
of business to be profitable in the coming years.
AGRO’s business profile is assessed as neutral, as its target lines of
business exhibit risk profiles with low loss probability, with an
attractive pricing environment and minimal number of players.
AGRO’s overall ERM assessment is appropriate, as the company employs a
robust ERM framework and infrastructure embedded across the AGL group of
companies of which AGRO is a member. A.M. Best considers AGRO’s risk
assessment capabilities to be aligned appropriately with its risk
The ratings also take into consideration the benefits and support AGRO
receives from the AGL group of companies — a broader, successful
franchise — and its importance to AGL’s overall business strategy and
This press release relates to Credit Ratings that have been published
on A.M. Best’s website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.
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