AM Best Affirms Credit Ratings of Assured Guaranty Re Overseas Ltd.

AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa” (Superior) of Assured Guaranty Re Overseas Ltd. (AGRO) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AGRO’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

AGRO’s risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR), is currently and projected by AM Best to be at the strongest level over the next three years. Shareholders’ equity of AGRO has increased in the past few years, and is forecast to continue doing so during the same timeframe. The company’s strong liquidity position, conservative investment portfolio and financial flexibility due to its affiliation with Assured Guaranty Re Ltd., the indirect parent, and Assured Guaranty Ltd. (AGL), the ultimate parent, as well as AGRO’s active capital management, provide support for the balance sheet assessment of strongest.

AGRO’s operating performance is assessed as adequate based on its operating results, which have been driven primarily by investment income. AGRO’s five-year average loss ratio remains low despite increased losses and decreased earned premium in 2020. Its overall expense ratio has been hampered by an increase in expenses and a decrease in earned premiums in 2020, and this has affected AGRO’s current overall operating performance.

AM Best assesses AGRO’s business profile as neutral. The company’s Life Financial Reinsurance program continues to exhibit risk profiles with very low loss probability. AGRO’s Aircraft RVI program was suspended in 2020 due to COVID-19, and is to resume when the company is once again comfortable with the program. AGRO has limited competition with minimal number of players in these lines of business segments.

AGRO’s overall ERM assessment is appropriate, as the company employs a robust ERM framework and infrastructure embedded across the AGL group of companies, of which AGRO is a member. AM Best considers AGRO’s risk assessment capabilities to be aligned appropriately with its risk profile.

The ratings also take into consideration the benefits and support AGRO receives from the AGL group of companies — a broader, successful franchise — and its importance to AGL’s overall business strategy and profile.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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