Unconditional Atrium buyout plans see ratings affirmed

AM Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of “a-” of Ariel Re. At the same time it has affirmed the ICR of “bbb-” of Ariel Holdings (Ariel) (both of Hamilton, Bermuda).

All ratings have been removed from under review with negative implications and assigned a stable outlook.

These rating actions follow the announcement that Ariel’s offer has been declared wholly unconditional with respect to Atrium Underwriting plc (Atrium) (United Kingdom), which owns the managing agent that operates Lloyd’s Syndicates 570 and 609.

The affirmation of the ratings reflects Ariel’s strong risk-adjusted capital position now that permanent financing has been secured.

In addition, Atrium brings a more seasoned and diverse book of business, as well as broader market access and greater geographic diversification to Ariel.

Both syndicates 570 and 609 have a solid track record of strong performance. Atrium will be a core business within the overall scope of Ariel’s corporate strategy. This acquisition is part of Ariel’s long-term plan to slowly diversify the organisation into different lines of business.

Partially offsetting these positive rating factors is the market has entered the early stage of its softening period. Ariel’s management will need to effectively manage the challenges of the soft market dynamics while concentrating on the integration specifics with regards to Atrium.