AM Best has affirmed the financial strength rating of A+ and the long-term issuer credit rating of “aa” for Assured Guaranty Re Overseas Ltd. (AGRO), based in Bermuda. The outlook for both ratings is stable.
The rating agency’s affirmation reflects its assessment of AGRO’s balance sheet strength as “strongest,” along with adequate operating performance, a neutral business profile, and appropriate enterprise risk management.
AGRO’s risk-adjusted capitalization remains at the strongest level, although it has declined notably from the previous year. Shareholders’ equity rose in 2024 for the second consecutive year, following a decline in 2022 that was linked to investment portfolio markdowns.
AM Best pointed to AGRO’s liquidity position, conservative investment approach, and financial flexibility – supported by its connection to Assured Guaranty Re Ltd., its indirect parent, and Assured Guaranty Ltd. (AGL), its ultimate parent – as key factors supporting its balance sheet evaluation. The company’s active capital management also contributed to the assessment.
AGRO’s operating results are primarily investment income-driven. AM Best reported that the company’s loss ratio has remained negative from 2022 through 2024, a shift from the higher loss ratios observed in 2020 and 2021. The current trend has been supported by favorable reserve development within AGRO’s aircraft residual value insurance business.
While the expense ratio remains elevated, it has declined significantly since 2022, following increased earned premiums driven by growth in existing lines.
Despite improvement in underwriting efficiency, AGRO’s combined ratio has remained relatively high, limiting returns on equity. The company has begun to address this constraint by allocating more capital toward earning assets, improving utilization over recent years.
AGRO’s net return on equity remains low due to under-utilized capital, though the trend has improved as the firm has increased its capital deployment.
AGRO’s business profile is considered neutral. The company has expanded exposure over the past year by growing several existing business lines. Many of these lines were introduced in the last two years.
AM Best has maintained consistent ratings for AGRO since at least 2022, indicating a sustained view of the company’s balance sheet resilience and risk controls.
The ratings incorporate the role AGRO plays within the broader AGL group and the support it receives from the parent company. AM Best considers AGRO a strategic component of AGL’s overall business model and operations.
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