Markel (MKL) And Units' Ratings Retained By A.M. Best

A.M. Best has retained the issuer credit ratings (ICR) of “bbb+” of Markel Corporation (NYSE:MKL) . Concurrently, the rating agency reiterated the financial strength rating (FSR) of A (Excellent) and the ICR of “a+” of the members of the Markel North America Insurance Group, and FSR of A (Excellent) and the ICRs of “a” of Markel Bermuda Limited and its affiliated operating companies. Each rating carries a stable outlook.

The rating giant has upgraded the issue ratings to “bbb+” from “bbb” of Alterra USA Holdings Limited and Alterra Finance, LLC as they are guaranteed by Markel.

The rating affirmations came on the back of the company’s heightened focus on insurance and non-insurance operations, sustained stable cash flows, and financial leverage and coverage ratios within the rating agency’s guidelines.

The agency affirmed the rating of Markel Bermuda given its sustained solid operational performance and risk-adjusted capitalization. Its operations in major global underwriting markets support diversification besides offering flexibility to enhance its underwriting portfolio composition. However, competitive operating markets and poor underwriting results weigh on the positives.

A.M. Best affirmed the ratings of members of the Markel North America Insurance Group on the back of leading excess and surplus lines organizations in the U.S., continued operating profitability (even in a soft market cycle) and strong risk-adjusted capitalization. However, the positives are offset by a high leverage, escalating expenses and a soft interest rate environment.

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Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as in maintaining credit worthiness. On the other hand, rating downgrades damage business, apart from increasing the cost of future debt issuances. We believe the ratings will help Markel to retain investor confidence and in writing more businesses, going forward.

Other notable names in the property and casualty space include Argo Group International Holdings, Ltd. (NASDAQ:AGII) , MS&AD Insurance Group Holdings, Inc. (OTC:MSADY) and Third Point Reinsurance Ltd. (NYSE:TPRE) .