AM Best Co has affirmed the financial strength rating (FSR) of A (excellent) and issuer credit ratings (ICR) of “a” of the property/casualty subsidiaries of holding company XL Group plc led by XL Insurance (Bermuda) Ltd.Concurrently, Best has affirmed the ICR of “bbb” of XL and XL Group Ltd.as well as all debt ratings for XL Group Ltd. The outlook for all ratings is stable.The rating affirmations reflect the organisation’s excellent risk-based capitalisation, strong worldwide market presence and the completed de-risking of the group’s investment portfolio.Despite XL subsidiaries’ property/casualty operating results being unprofitable through the first six months of 2011 (with a combined ratio of 110 percent due to the worldwide catastrophes), the group averaged a favourable combined ratio of 92.3 percent for the previous five years.Best said it remained encouraged by the strategies implemented by the XL management team. These strategies were supported by an enhanced risk management programme and a continued focus on underwriting as the key component of the group’s business approach.Management’s focus on its core underwriting strengths has been exhibited by the recent addition of a substantial number of new senior underwriters, said the ratings agency.Furthermore, as a result of XL’s completed de-risking of its investment portfolio, the organisation has successfully reduced the level of market volatility in its investment results, which for the past several years over shadowed the solid operating performance of its core businesses, said Best.XL’s debt-to-capital ratio was expected to remain in the 15 percent to 25 percent range as capital was anticipated to be enhanced by strong earnings. The fixed charge coverage stabilised in 2010 and was expected to remain comparable with the current level over the near term.Partially offsetting these positive factors was XL’s exposure to large severity events and the current soft pricing stage of the underwriting cycle, said Best. Additionally, investment returns were expected to be muted by low interest rates and financial market variability.