AM Best Affirms Credit Ratings of Aspen Insurance Holdings Limited and Its Rated Subsidiaries

AM Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of Aspen Insurance UK Limited (AIUK) (United Kingdom), Aspen Bermuda Limited (ABL) (Bermuda), Aspen American Insurance Company (AAIC) (Austin, TX) and Aspen Specialty Insurance Company (ASIC) (Bismarck, ND). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb” (Good) of Aspen Insurance Holdings Limited (Aspen) (Bermuda), a non-operating holding company. AM Best also has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) 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 (ratings) is stable. (Please see below for a detailed listing of the Long-Term IRs.)

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.

Aspen’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). 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.

Aspen reported positive underwriting performance for a second consecutive year in 2023, achieving a combined ratio of 92.1% (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% (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.

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

Aspen Insurance Holdings Limited—

-- “bb+” (Fair) on USD 275 million 5.95% fixed-to-floating rate perpetual non-cumulative preference shares

-- “bb+” (Fair) on USD 250 million 5.625% perpetual non-cumulative preference shares

-- “bb+” (Fair) on USD 250 million 5.625% perpetual non-cumulative preference shares

The following indicative Long-Term IRs under the universal shelf registration have been affirmed, with stable outlooks:

Aspen Insurance Holdings Limited—

-- “bbb” (Good) on senior unsecured debt

-- “bbb-” (Good) on senior subordinated debt

-- “bb+” (Fair) on junior subordinated debt

-- “bb+” (Fair) 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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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