AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of AMEX Assurance Company (AMEX) (Chicago, IL). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect AMEX’s balance sheet strength, which AM Best assesses as very strong, as well as its very strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
AMEX’s balance sheet strength assessment of very strong is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), consistent reserve redundancies, conservative underwriting leverage metrics and a strong liquidity enhanced by steady operating cashflows. Despite the company’s annual dividend strategy, the capital position of AMEX remains supportive of its overall balance sheet strength.
AMEX’s very strong operating performance demonstrates pre-tax return on revenue and return on equity significantly outperforming AM Best’s commercial property composite over the most recent five- and 10-year periods. The company’s favorable underwriting results are supported by loss and loss adjustment expense ratios that compare favorably to industry peers, along with a competitive expense structure. Additionally, investment yields have modestly outperformed the industry composite on a five- and 10-year average basis, benefiting from the company’s allocation to short-term fixed-income investments in the higher interest rate environment.
AMEX has a neutral business profile which is supported by a strong presence and distribution network within its niche market serving the travel industry.
AMEX’s ERM is assessed as appropriate and is well-aligned with its overall risk profile. The risk management program is overseen by AXP’s board of directors. The board provides oversight of the enterprise-wide risk management framework and processes. In addition, the company maintains an appropriate level of catastrophe reinsurance covering air flight, travel accident and accidental death and disability exposures.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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