AM Best Affirms Credit Ratings of Chubb Limited and Its Subsidiaries
AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and Long-Term Issuer Credit Ratings (ICR) of “aa+” for Chubb Limited's subsidiaries, including Chubb US Group and Chubb Bermuda. The outlook for these ratings is stable. The ratings reflect the group's strong balance sheet, very strong operating performance, and favorable business profile. Chubb is noted as the eighth-largest U.S. property-casualty insurer, with a strong underwriting record despite challenges from catastrophe losses and COVID-19 in recent years.
- Affirmation of FSR of A++ (Superior) and ICR of 'aa+' reflects strong financial health.
- Chubb US Group has demonstrated positive operating and underwriting results for the last 10 years.
- Positioned as the eighth-largest U.S. property-casualty insurer boosts market credibility.
- Underwriting results are expected to be pressured in 2020 due to heightened catastrophe activity and COVID-19 impacts.
- Surplus growth at subsidiaries may be limited due to dividend payments.
AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” of the subsidiaries of Chubb Limited (Zurich, Switzerland) [NYSE: CB], which include the members of the Chubb US Group of Insurance Companies (Chubb US Group) and the members of Chubb Bermuda Insurance Ltd. (Chubb Bermuda) and Chubb Tempest Reinsurance Ltd. (Chubb Tempest Re) (both domiciled in Bermuda).
In addition, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” of Combined Insurance Company of America (headquartered in Chicago, IL) and Combined Life Insurance Company of New York (Latham, NY) (together known as the Combined companies). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of ACE Life Insurance Company (ACE Life) (Stamford, CT).
Lastly, AM Best has affirmed the Long-Term ICRs of “a+” and the Long-Term Issue Credit Ratings (Long-Term IR) of Chubb Limited (CB) and Chubb INA Holdings Inc. The outlook of these Credit Ratings (ratings) is stable. (Please see the link below for a detailed listing of the companies and ratings.)
The ratings of the Chubb US Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its very strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). The group’s risk-adjusted capitalization has consistently remained strongly supportive of the ratings, and it exceeds the threshold for the strongest categorization by a wide margin, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s balance sheet strength also reflects a consistently prudent loss reserve position and the use of a comprehensive reinsurance program with high quality reinsurance partners.
Chubb US Group’s very strong operating performance is reflected by return measures that have materially outperformed those of the commercial casualty composite over the past five years. The Chubb US group has generated positive underwriting income, operating income and net income every year for the last 10 years, despite the impact of unusually high catastrophe losses in certain years. The group’s underwriting results will be pressured in 2020, due to heightened catastrophe activity in the United States and the impact of COVID-19. The continued robust pricing environment in the majority of its commercial business lines globally should be supportive of a return to the group’s typically very strong underwriting performance in 2021, assuming a return to normalized catastrophe activity.
Chubb US Group’s favorable business profile is supported by its position as the eighth-largest U.S. property-casualty insurer, based on 2019 direct written premiums (DWP). As of 2019, the group is the second-largest U.S. commercial lines insurer with
The ratings of Chubb Tempest Re and its member reflect their balance sheet strength, which AM Best categorizes as strongest, as well as their very strong operating performance, favorable business profile and appropriate ERM.
The ratings of Chubb Bermuda and its member reflect their balance sheet strength, which AM Best categorizes as strongest, as well as their very strong operating performance, neutral business profile and appropriate ERM. The ratings also reflect the implicit support that they receives from CB, its ultimate parent.
The ratings of the Combined companies reflect their balance sheet strength, which AM Best categorizes as very strong, as well as their strong operating performance, neutral business profile and appropriate ERM. The ratings also reflect the companies’ strategic role in supporting the organization’s global accident and health segment.
The ratings of ACE Life reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, very limited business profile and appropriate ERM. The ratings also reflect the continued financial support received from its parent.
Each of these groups benefit from the financial flexibility provided by CB, which maintains financial leverage that is in line with its current ratings, as well as additional liquidity sources given its access to capital markets and line of credit. AM Best expects that earnings and cash flows from CB’s operating subsidiaries will allow it to support risk-adjusted capitalization should the need arise. At the same time, surplus growth at each group occasionally has been limited over the past five years by the payment of dividends. These dividends vary based on capital needs at the various subsidiaries.
A complete listing of Chubb Limited’s FSRs, Long-Term ICRs and Long- and Short-Term IRs also is available.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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