AM Best Affirms Credit Ratings for AXIS Capital Holdings Limited and Its Operating Subsidiaries

OLDWICK, N.J.–()–AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of the operating subsidiaries of AXIS Capital Holdings Limited (Pembroke, Bermuda), collectively referred to as AXIS. Additionally, AM Best has affirmed the Long-Term ICR of “a-” and the existing Long-Term Issue Credit Ratings (Long-Term IR) of AXIS Capital Holdings Limited. The outlook of these Credit Ratings (ratings) remain negative. (See below for a detailed listing of subsidiaries and Long-Term IRs.)

The ratings reflect AXIS’ balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM) from the group’s risk profile.

The negative outlook reflects concerns regarding AXIS’ operating performance. Historically, AXIS’ operating performance was among the top in its peer group. Concerns have centered on the group’s insurance segment, with combined ratios trending higher and underwriting income pressured by 2017’s insurance segment underwriting losses, which eroded just over four years of underwriting income due to natural catastrophe losses. However, AXIS has taken measures to address these issues and, despite elevated catastrophic activity in 2018, the insurance segment produced its strongest results since 2014. Overall earnings for 2018 were impacted by natural catastrophe losses, but they remained well within risk tolerances. Going forward, AM Best’s expectation is that AXIS’ operating performance will continue to show measurable improvement.

AXIS continues to maintain levels of risk-adjusted capitalization that place its balance sheet strength in the “strongest” category. The group’s balance sheet assessment also benefits from a favorable amount of financial flexibility and flexible capital within operating subsidiaries, but also reflects capital management strategies that have included consistent common and preferred dividends, as well as share repurchases.

AM Best views AXIS’ business profile as favorable and the group consistently ranks in the top half of AM Best’s Global Reinsurance Top 50 while also maintaining a well-regarded profile as a specialty underwriter of complex risks. The group’s ERM is sophisticated and embedded throughout the organization. AM Best believes that AXIS’ risk management is appropriate given its complex risk profile.

The FSR of A+ (Superior) and the Long-Term ICR of “aa-” have been affirmed with negative outlooks for the following subsidiaries of AXIS Capital Holdings Limited:

  • AXIS Specialty Limited
  • AXIS Re SE
  • AXIS Reinsurance Company
  • AXIS Specialty Europe SE
  • AXIS Surplus Insurance Company
  • AXIS Insurance Company

The following Long-Term IRs have been affirmed with negative outlooks:

AXIS Capital Holdings Limited—

— “bbb” on $225 million 5.5% non-cumulative preferred shares, Series D

AXIS Specialty Finance LLC (guaranteed by AXIS Capital Holdings Limited)—

— “a-” on $500 million 5.875% senior unsecured notes, due 2020

The following indicative Long-Term IRs under the current shelf registration have been affirmed with negative outlooks:

AXIS Capital Holdings Limited—

— “a-” on senior unsecured debt

— “bbb+” on subordinated debt

— “bbb” on preferred stock

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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