AM Best has affirmed the A (excellent) financial strength rating of Zurich Specialities London (ZSL).
It said the rating had been removed from under review with negative implications and a stable outlook had been assigned.
The ratings agency said its actions reflected ZSL’s importance to the Zurich Financial Services Group, its excellent capitalisation according to AM Best’s risk-adjusted capital model, and ZSL’s business profile in specialist London market insurance sectors.
Offsetting factors in the rating included the 2003 required reserve increase related to discontinued lines and the potential for further strengthening. The ratings agency said it believed that measures undertaken by ZSL had made this unlikely although it would continue to monitor the company’s reserve position.
It said it expected stronger earnings in 2004 as ZSL’s net loss experience improves, leading to a strengthened stand-alone risk-adjusted capitalisation, assuming the company’s current policy of not upstreaming capital was maintained.
