Moody's praises "high-quality investment portfolio"
Moody's has assigned provisional debt ratings (senior at (P)Baa1) to the new universal shelf registration of Allied World Assurance Company Holdings.
The outlook for Allied World's ratings is stable.
According to Moody's, Allied World's ratings reflect its market position as a specialty niche provider of property and casualty insurance and reinsurance, its low underwriting and financial leverage targets following its July 2006 initial public offering (IPO), and a high-quality investment portfolio.
These core strengths are tempered by the company's limited operating history relative to a full underwriting cycle in the highly cyclical specialty insurance and reinsurance sectors, and by the inherent underwriting volatility in many of these specialty lines, which include catastrophe-exposed property risks and complex casualty-based exposures including directors' and officers' liability.
Moody's expects that the company's financial leverage will remain below 25%, earnings coverage greater than 4 times, GAAP gross underwriting leverage less than 3.5 times and annual catastrophe losses will not cause a decline in shareholders' equity in excess of 10%.
The following provisional ratings have been assigned:
Allied World Assurance Company Holdings Ltd -- provisional senior unsecured debt at (P)Baa1; provisional subordinated debt at (P)Baa2; provisional preferred stock at (P)Baa3.
