AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) of XL Bermuda Ltd (AXA XL) (Bermuda) and its subsidiaries. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AXA XL’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.

Best said AXA XL’s operating performance has been impacted by volatile underwriting results in recent years, stemming from various issues, including increased frequency in catastrophe losses and the COVID-19 pandemic.

In response, the group has implemented various changes to leadership and underwriting processes, the ratings agency said. After a tumultuous 2020, the group’s underlying underwriting performance has begun to show improvements through the first half of 2021, reflecting broad based rate improvement and corrective underwriting actions implemented during the period.

As market dynamics stabilise, AM Best anticipates that the group will demonstrate continued improvement and more stable operating results.

Additionally, AXA XL’s parent organisation, AXA S.A., remains supportive of the group’s business and continues to contribute both implicit and explicit support.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed, with stable outlooks for XL Bermuda Ltd and subsidiaries.