Rating agency AM Best has upgraded its financial strength rating of (re)insurer Lancashire to A from A-.

The outlook on the ratings of the Bermuda-based, London-listed firm have been revised to stable from positive.

AM Best said the upgrade reflects Lancashire’s excellent risk-adjusted capitalisation, very strong operating results since inception, experienced management team and the financial flexibility afforded to the group by the listing of Lancashire Holdings’ shares on the London Stock Exchange.

It added that the rating action also reflects Lancashire's strong risk management framework, which has mandated its conservative operating strategies.

Partially offsetting these positive attributes, according to AM Best, is the company’s exposure to low frequency, high severity events due to its targeted lines of business.