Aspen Insurance has been given a strong endorsement for this year and 2008 by the AM Best rating agency.

It is likely to see retained earnings of above $150 million for both this year and next, according to the agency, and that together with its balanced speard of business between its Bermuda and London operations has impressed observers.

Reflecting this, AM Best had improved from "A-" to "A" Bermuda-based Apsen's financial strength rating and made the same improvement from "a-" to "a" for its issuer credit rating, with the ratings for both remaining stable.

These improvments bring the Bermuda entity into line with ratings given to Aspen Insurance UK Limited at the end of last week.

Explaining the reason for the improvement, AM Best said: "The rating upgrades reflect a sustainable improvement in Aspen Insurance's stand alone risk-adjusted capitalisation, which is likely to be supported by strong retained earnings of above $150 million in both 2007 and 2008.

"In addition, Aspen has continued to balance the spread of business between its two main operating entities, Apsen and its sister company, Aspen Insurance UK Limited, through the use of intra-group quota share arrangements.

"This even distribution of risk, Apsen's excellent risk-adjusted capitalisation and excellent financial strength of the consolidated group has led AM Best to harmonise the ratings of both entities."

The agency states that it believes Aspen is likely to continue to produce excellent earnings in 2007, benefiting from profitable underwriting, strong rate adequacy in the property catastrophe market (despite weakening) and improved investment returns. It also notes the firm has a stable combined ratio in the region of 80 percent which is likely to be further supported by another benign US hurricane season.