A.M. Best Co. has affirmed the financial strength rating and the issuer credit ratings of ?A? and ?a? of AXIS Specialty Limited and its operating affiliates. It also affirmed the ICR of ?bbb? and all existing debt ratings of AXIS Capital Holdings Limited. The outlook for all ratings is stable.

The ratings reflect the Bermuda-based company?s ?excellent risk-based capitalisation, strong operating performance, a highly experienced management team and well established broker relationships,? said Best in a release. It pointed to the company?s book of business which was diversified both geographically and by line.

AXIS has also expanded into professional lines and increased its writings in umbrella and excess liability coverages. Casualty lines now account for approximately 30 percent of AXIS? gross premium writings. AXIS lost almost $1 billion as a result of last year?s hurricanes, however, Best noted that the company still managed to produce a combined ratio just over breakeven at 101.8 percent. Operating results through March 31, 2006 continue to be strong with a 79.5 percent combined ratio and shareholders? equity at $3.6 billion.

The solid operating performance is somewhat tempered by the company?s short operating history and the planned departure of John Charman, chief executive officer will retire from AXIS on December 31, 2008, said Best.

?Despite these concerns, A.M. Best expects AXIS to continue managing its capital base very conservatively within acceptable ranges to support its current ratings and meet the more stringent capital requirements for a recently established Bermuda entity,? said Best.