Best Affirms Allied World and Operating Affiliates ‘A’ Ratings

July 16, 2009

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of Bermuda-based Allied World Assurance Company and its operating affiliates. Best also affirmed the ICR of “bbb”, the debt rating of “bbb” on $500 million of senior unsecured notes due 2016 and the indicative ratings of Allied World Assurance Company Holdings, Ltd. The outlook for all ratings is stable.

In addition Best affirmed the FSR of ‘A’ (Excellent) and ICRs of “a” of Delaware-based Darwin National Assurance Company and Darwin Select Insurance Company, which is based in Arkansas. These companies have now been incorporated into Allied World.

“Allied World’s ratings reflect its strong risk-adjusted capitalization, stable management team and strong operating performance,” Best explained. “In 2008, Allied World was one of only a few Bermuda-based property/casualty insurers to grow shareholders’ equity despite the market turmoil and catastrophe events.

“During 2008, Allied World established a U.S. reinsurance company, expanded its presence in Europe and Hong Kong and acquired Darwin, which provided a book of U.S. small account primary healthcare and professional liability business.

“Darwin represents a material component of Allied World’s primary insurance operations in the United States, and these two organizations now have been integrated into Allied World’s operations, providing for significant efficiencies and controls.”

However, Best indicated that the “current soft pricing environment in addition to the unstable financial markets,” constitute offsetting factors. But Best added that, “given Allied World’s strong risk-adjusted capital position, risk awareness and strategic expansion initiatives described above, the company is well-positioned for varying market conditions.”

Best summarized the ratings covered as follows:
The FSR of’ A’ (Excellent) and ICRs of “a” have been affirmed for Allied World Assurance Company, Ltd and its following operating affiliates:
— Allied World Assurance Company (U.S.) Inc.
— Allied World National Assurance Company
— Allied World Reinsurance Company
— Allied World Assurance Company (Europe) Limited
— Allied World Assurance Company (Reinsurance) Limited
— Darwin Select Insurance Company
— Darwin National Assurance Company

The following debt rating has been affirmed:
Allied World Assurance Company Holdings, Ltd—
— “bbb” on $500 million 7.50% senior unsecured notes, due 2016
The following indicative ratings have been affirmed for securities available under shelf registration:
Allied World Assurance Company Holdings, Ltd—
— “bbb” on senior unsecured
— “bbb-” on subordinated
— “bb+” on preferred stock

Source: A.M. Best – www.ambest.com

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