Axis Specialty Ltd. has had its `A' credit rating affirmed by Standard and Poors in the wake of its purchase of renewal rights for directors and officers liability insurance written by Lumbermens Mutual Casualty Co.

Axis' parent company, Axis Capital Holdings Ltd. has also had S&P's `A' financial strength rating affirmed on its four other units. S&P said the purchase of the Lumbermens' renewal rights gives Axis an exclusive option to write certain classes of business underwritten by LMCC (at its discretion and on a policy-by-policy basis) in return for a commercially negotiated override commission. "Axis remains extremely well capitalised and appears at present to maintain a level of capitalisation higher than many of its competitors. The market appears solid for most covers it writes through 2003," S&P said. "Axis should finish 2003 with extremely strong earnings and a `AAA' capital adequacy ratio. Beyond 2003 or 2004, the traditional tough competitive environment in specialty insurance and reinsurance will reassert itself, driving down margins for all players."