A.M. Best Co. reiterated the Issuer Credit Ratings (ICR) and
debt ratings of "bbb" of
Argo Group International Holdings, Ltd
). Concurrently, the rating agency reiterated the Financial
Strength Rating (FSR) of A (Excellent) and ICR of "a" for Argo Re
Ltd. and its subsidiaries. Argo Re is a subsidiary of Argo Group
Additionally, A.M. Best reiterated the ICR of "bbb" and the debt
rating of "bbb" of 6.5% on $143.75 million senior unsecured notes
due 2042 of Argo Group US, Inc., the wholly owned subsidiary of
Argo Group International Holdings.
All ratings carry a stable outlook.
The rating affirmations account for Argo Group's continued solid
profitability, low debt-capital ratio and financial flexibility
it provides to Argo Re. The affirmation also reflects Argo Re's
sustained solid operating performances, product expertise in
niche areas, sturdy capitalization and favorable reserve
However, execution risks related with the company expanding
globally, competitive pressures, low new money investment yields,
increasing expenses, and soft macro conditions dwarf the
A.M. Best stated that management's efficiency to integrate
acquisitions despite affecting the existing operations will be
taken into considerations in future rating reviews.
A.M. Best anticipates that efforts to lower property exposure and
improve operational results will favorably reflect in Argo Re's
performance in the near term.
The rating agency stated that though the ratings are well
positioned at the current level, they are subject to downgrades
if underwriting and operating results deteriorate considerably,
or if there is unfavorable loss reserve development or the
risk-adjusted capital erodes.
Rating affirmations or upgrades from credit rating agencies play
an important part in retaining investor confidence on the stock
as well as maintaining credit worthiness in the market. Rating
downgrades, therefore, adversely affect the business, apart from
increasing the costs of future debt issuances. We believe that
strong ratings will help Argo Group retain investor confidence
and help it write more businesses going forward, thereby boosting
Argo Group carries a Zacks Rank #3 (Hold). Property and casualty
Everest Re Group Ltd
Global Indemnity plc
HCI Group, Inc
) all carry favorable Zacks Rank #1 (Strong Buy) and are worth
ARGO GROUP INTL (AGII): Free Stock Analysis
GLOBAL INDEMNTY (GBLI): Free Stock Analysis
HCI GROUP INC (HCI): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
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