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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 22, 2016 04:02 PM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit ratings (ICR) of “bbb+” of Argus Insurance Company Limited (Argus Insurance) and Bermuda Life Insurance Company Limited (Bermuda Life), both subsidiaries of Argus Group Holdings Limited (Argus Group) [BSE:AGH.BH]. Concurrently, A.M. Best has affirmed the ICR of “bb+” for the Argus Group. The outlook for each rating is stable. All companies are domiciled in Hamilton, Bermuda.
The rating affirmations reflect the Argus Group’s consolidated positive earnings, the strengthening of its capital metrics and improvement of its asset quality. On a consolidated basis, the Argus Group’s underwriting and net income results have been driven primarily by strong positive earnings in the employee benefits segment. In addition, the Argus Group has been transitioning its investment portfolio to higher quality lower risk assets. As a result, asset valuation write-downs have been minimal, and the stabilization of the investment portfolio has resulted in stronger investment income. Furthermore, the transition of the investment portfolio has resulted in better asset-liability matching. The positive net income has allowed the organization to strengthen its capital level through retained earnings. Bermuda Life (the organization’s domestic life, annuity, pension and health insurance subsidiary) reported strong net income results, which were driven primarily by lower loss ratios achieved through various cost containment initiatives. Furthermore, in order to increase the quality of assets at Bermuda Life, the previously high level of intercompany receivables has been reduced substantially through dividends and an asset transfer from an affiliate. Argus Insurance, the group’s domestic property/casualty writer, continues to record favorable underwriting and overall results in non-catastrophe years and maintains more than adequate risk-adjusted capitalization.
Offsetting factors include a recent earnings decline from the impact of rising interest rates on the value of the fixed income portfolio. Furthermore, Argus Insurance’s fiscal year-end 2015 results were negatively impacted by losses incurred from Hurricanes Fay and Gonzalo in October 2014. Additionally, although the Argus Group is gradually growing its European property/casualty operation, the geographic diversification of consolidated premium and earning remains low.
This press release relates to rating(s) 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.
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