AM Best has affirmed the financial strength rating of A+ (Superior) and the long-term issuer credit ratings of “aa-” (Superior) of Bermudian-based Arch Reinsurance Ltd and its strategic affiliates.

Concurrently, the ratings agency has affirmed the long-term ICRs of “a-” (Excellent) and the long-term issue credit ratings of Bermudian-based Arch Capital Group Ltd, the ultimate holding company; Arch Capital Group (US) Inc of Delaware; and Arch Capital Finance LLC, also of Delaware.

The outlook of these credit ratings is stable.

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

The ratings are based on Arch’s historically strong operating performance, as well as its balance sheet strength, as measured by Best’s capital adequacy ratio, and strong management team.

In 2021, Arch continued to perform favourably and improved upon its 2020 performance, which was impacted by Covid-19.

Arch also has maintained its strong risk-adjusted capital position, which contemplates a significant stressed ultimate loss, as calculated according to AM Best’s “Evaluating Mortgage Insurance” criteria procedure.

AM Best utilised a conservative stress scenario for Arch’s mortgage insurance book of business when calculating stress-tested risk-adjusted capitalisation. AM Best also recognises that the mortgage insurance business relies heavily on financial models that can vary from actual results.

The stable outlooks reflect AM Best’s expectations that the group’s strongest level of balance sheet strength will continue to be supported by strong and stable operating performance, favourable reserve development, diverse business profile and well-defined ERM programme

The FSR of A+ (Superior) and the long-term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for Arch Reinsurance Ltd and its following affiliates: Arch Reinsurance Company, Arch Insurance Company, Arch Specialty Insurance Company, Arch Property Casualty Insurance Company, Arch Indemnity Insurance Company, Arch Insurance Canada Ltd, Alwyn Insurance Company Limited, and Arch Insurance (UK) Limited.