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Argus rating of A- affirmed by AM Best

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a-" (Excellent) of Argus Insurance Company Limited and Bermuda Life Insurance Company Limited.

Both companies are subsidiaries of Argus Group Holdings Limited.

Concurrently, AM Best has affirmed the Long-Term ICR of "bbb-" (Good) of Argus Group.

The outlook of these Credit Ratings is stable.

Meanwhile, in an Argus Group statement today, CEO Alison Hill commented: “AM Best’s rating is a reflection of the Argus Group’s focus on diversifying the company’s local and international products and services, which includes the merging of the broker business in Europe to create Antes, the largest domestic insurance broker in Malta and the purchase in 2020 of the two largest primary healthcare practices in Bermuda.

“In addition to our balance sheet strength, as an organisation we will continue to do the right thing for our customers to ensure everyone wins. We will invest in diverse and inclusive teams, provide outstanding experiences for our customers and deliver attractive and sustainable shareholder returns.”

Best said the ratings reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Argus Group’s risk-adjusted capitalisation is at the strongest level, as measured by Best's Capital Adequacy Ratio, as of fiscal year-end 2021. This is in line with fiscal-year 2020, and was driven primarily by its earnings retention net of dividends and share repurchases.

For several years, the group has made significant progress on reducing its exposure to illiquid assets and redeploying capital into high quality and marketable securities to increase liquidity and add financial flexibility.

This transition is mostly complete as the vast majority of the portfolio is allocated to investment grade fixed income and cash and short-term investments.

Exposures to Bermudian equities and property investments are minimal with the sale of a large Bermudian property holding in 2021.

AM Best anticipates that the Argus Group will continue to prudently manage its catastrophe risk exposure through its comprehensive reinsurance programme to maintain the balance sheet strength assessment of strongest over the medium term.

Reported operating gains in 2021 were favourable, albeit down slightly year over year, and through the period that ended September 30, results exceeded projections.

Favourable performance through the first six months of fiscal-year 2022 was due to better-than-expected premium growth in the employee benefits segment and favourable operating expenses enterprise-wide.

A challenge for the company continues to be premium development within Bermuda due to health reform measures and extending its reach into other markets.

Argus Group’s management also has been positioning itself to actively grow its fee business in the wake of Bermuda’s health reform measures, which were enacted in mid-2019. The acquisition of two primary care physician practices in 2020 hedges risks to Argus Group’s health insurance business from Bermuda’s health reform and further diversifies the group’s revenue.

This vertical market strategy demonstrates Argus Group’s adaptability to manage change in the market.

The growing fee revenue streams from health providers, pension management and brokerage have grown significantly over the past number of years and now represent a material portion of enterprise revenue.

Argus Group said AM Best has affirmed the Group’s Financial Strength Rating of A- (Excellent).

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Published December 20, 2021 at 6:13 pm (Updated December 20, 2021 at 6:26 pm)

Argus rating of A- affirmed by AM Best

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