AM Best Co has announced they have upgraded the financial strength rating to A+ (Superior) from A (Excellent) and issuer credit ratings (ICR) to ‘aa-’ from ‘a+’ of AXIS Specialty Limited (AXIS) and its operating affiliates.Concurrently, AM Best has upgraded the ICR to ‘a-’ from ‘bbb+’ and all existing debt ratings of AXIS’ parent, AXIS Capital Holdings Limited (ACHL), both domiciled in Hamilton, Bermuda. The outlook for all ratings has been revised to stable from positive.AM Best stated: “The ratings reflect AXIS’ superior risk-adjusted capitalisation, long-term track record of strong operating performance through varied market conditions and robust enterprise risk management controls.“AXIS’ operating strategy has historically emphasised underwriting profitability with a balanced risk profile. Given the current soft casualty market conditions, the company is well positioned with a diversified book of business and an expanding worldwide infrastructure. AXIS’ book of business has historically emphasised short to medium-tail lines and focuses on speciality risks including, but not limited to, property, marine, professional lines, accident and health, credit and bond, agriculture, along with property catastrophe coverages.“AXIS’ historical operating performance has been strong, which places it among the top of its Bermudian peer group. In AM Best’s opinion, AXIS’ solid performance is attributable to its highly developed and integrated risk management controls and strong systems capabilities. Furthermore, AXIS retains a very strong level of risk-based capitalisation under various AM Best stress scenarios.However, AM Best noted that partially offsetting these positive rating factors is AXIS’ exposure to large catastrophe losses as well as the current soft casualty market environment.“These challenges and other rating factors, which could lead to a downgrading of AXIS’ ratings or a revision in its outlook to negative, include unfavourable operating profitability trends, outsize catastrophe or investment losses relative to its peers, significant adverse loss reserve development and/or a material decline in its risk-adjusted capital.“Alternatively, factors that could lead to an upgrading of the company’s ratings include continued long-term favourable operating profitability coupled with maintaining strong risk-adjusted capital levels.”