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A.M. Best Affirms Credit Ratings of Beazley Insurance Designated Activity Company and Beazley Insurance Company, Inc.

A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Beazley Insurance Designated Activity Company (Beazley Ins DAC) (Ireland) and Beazley Insurance Company, Inc. (BICI) (Farmington, CT). The outlook of these Credit Ratings (ratings) is stable.

Concurrently, A.M. Best has commented that the ratings of Lloyd’s Syndicate 2623, Lloyd’s Syndicate 623, Lloyd’s Syndicate 3623 and Lloyd’s Syndicate 3622 (the syndicates) remain unchanged. The syndicates are managed by Beazley Furlonge Limited, and their ratings reflect the financial strength of the Lloyd’s market, which underpins the security of all syndicates.

The ratings of Beazley Ins DAC and BICI reflect each company’s strategic importance to and integration within Beazley plc (Beazley or the group). Both companies are wholly owned by Beazley, which is the ultimate non-operating holding company and consolidating unit for the group. The ratings also reflect the group’s consolidated balance sheet strength, which A.M. Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Beazley Ins DAC is viewed to be fully integrated within and strategically important to Beazley, as its internal reinsurer. The company reinsures 75% of the profit or loss of the syndicates’ distribution to Beazley’s Lloyd’s corporate member (after a deductible in the case of a loss). Therefore, it has shared in the strong profile and combined profitability of Lloyd’s Syndicates 2623, 3623 and 3622 and will continue to do so for Lloyd’s Syndicates 2623 and 3623 going forward. In addition, Beazley Ins DAC obtained a direct insurance licence in July 2017, which enables the group to offer non-Lloyd’s underwriting capacity in the European Union.

BICI is strategically important to Beazley as an expanding admitted insurer in the United States. In addition, A.M. Best expects BICI’s importance to the group to increase over the medium term, as its premium and earnings base increase.

The group’s balance sheet strength is underpinned by risk-adjusted capitalisation, which, as measured by Best’s Capital Adequacy Ratio (BCAR), is categorised as strongest. Beazley’s operating performance is strong, as evidenced by the group reporting a five-year average return on equity of 19% (2012-2016) and an average combined ratio over the same period of 88%. Performance is expected to remain strong, although catastrophe losses will dampen technical and operating results in 2017.

Beazley has a well-established business profile, with a strong franchise as an internationally recognised Lloyd’s insurance group. The group has a good competitive position in its target markets, but competition is strong and market conditions remain challenging. The group’s gross premium base reached USD 2.2 billion in 2016 and is expected to grow marginally to USD 2.3 billion in 2017.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

Contacts:

A.M. Best
Myles Gould, +44 20 7397 0267
Senior Financial Analyst
myles.gould@ambest.com
or
Catherine Thomas, +44 20 7397 0281
Senior Director, Analytics
catherine.thomas@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

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