Re-Insurance

Ratings of Assured Guaranty units affirmed

  • Strength assessed: the ratings of two Assured Guaranty business have been affirmed by Kroll Bond Rating Agency (File photograph)

Kroll Bond Rating Agency has affirmed its insurance financial strength rating of AA+ for Assured Guaranty Municipal Corporation, and assigned its subsidiary Assured Guaranty (Europe) a AA+ insurance financial strength rating, both with stable outlooks.

Assured Guaranty Municipal is a financial guaranty subsidiary of Bermudian-based Assured Guaranty Ltd.

Kroll said Assured Guaranty Municipal’s substantial claims paying resources “and proven management team, and a corporate governance framework and credit and risk management processes were considered to be strong and reflective of industry best practices”.

The rating agency said Assured Guaranty (Europe) had a local management team “that exhibits extensive financial guaranty expertise in key sectors of the European market, and a financial position that is strong due to a combination of intragroup reinsurance and support arrangements, which serve to bolster the company’s stand-alone capital base”.

Both businesses were said to have the ability to withstand KBRA’s stress case loss analysis, which incorporates significant deterioration across multiple sectors across the breadth their insured portfolios.

Additionally, while Kroll acknowledged that some recent developments in Puerto Rico may signal a more positive path going forward, their analysis incorporated higher severity assumptions applicable to Assured Guaranty Municipal’s Puerto Rico exposure than their current stress scenario. Based on those higher assumptions, Kroll determined that these results were consistent with Assured Guaranty Municipal’s rating, and that ultimate loss recoveries would have to approach zero to place downward pressure on the rating.

Dominic Frederico, president and chief executive officer of Assured Guaranty, said: “We are pleased that Kroll Bond Rating Agency has once again recognised the strength of the Assured Guaranty franchise by affirming AGM’s strong AA+ rating, reflecting the high level of protection available to investors in AGM-insured bonds and by assigning AGE a AA+ rating based on its strong corporate governance structure, experienced underwriting team and robust capital support from AGM.”