Rating agency praises (re)insurer’s performance, capital and risk management

Rating agency AM Best has revised its outlook on the A financial strength rating of Arch Reinsurance and affiliates to positive from stable.

The agency said the revised outlook reflects Arch’s “continued superior operating performance, consistently excellent capitalisation and demonstrated risk management prowess”.

It added that Arch maintains a strong underwriting culture which centres on cycle management and adapting to market conditions.

AM Best said overall operating results since Arch’s inception have been strong and in certain instances have exceeded most peers in the sector. Typically, Arch has had a smaller share of major industry losses, which the agency said demonstrates the superior risk management of the company.

Furthermore, AM Best believes Arch has prudent investment portfolio and conservative reserving philosophy, which helps maintain a strong balance sheet.

However, AM Best said that the current soft conditions affecting all reinsurers partially offset the positive rating attributes.