S&P Global Ratings has upgraded Ascot Group Limited, a Bermuda-based specialty re/insurance company, raising its long-term issuer credit rating to BBB+ from BBB.
According to S&P, the upgrade reflects a substantial strengthening of Ascot’s capital position, which now stands above the agency’s 99.99% confidence level.
This improvement has been supported by consistent underwriting profitability, solid investment returns, and active capital management.
S&P highlighted that Ascot’s capitalisation is comfortably in excess of requirements for severe stress scenarios and is expected to be maintained at this level through at least 2027.
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S&P also emphasised Ascot’s lower underwriting volatility compared to other similarly rated companies, pointing to a five-year average combined ratio of 96.7% between 2020 and 2024.
While losses from the California wildfires are expected to push the ratio closer to 97% in 2025, S&P projects improvement to 95%-96% over 2026–2027. Forecasts include annual premium growth of 5%-10% and net income between $300 million and $350 million during that period.
The rating agency noted Ascot’s strategic expansion in casualty lines, which accounted for 36% of the portfolio by the end of 2024 compared with 27% in 2020, while exposure to property catastrophe business has been reduced. S&P considered Ascot’s casualty portfolio to be well diversified, with limited exposure to legacy US risks that have challenged some competitors.
Financial leverage and coverage metrics are expected to remain consistent with peers, with S&P forecasting leverage of around 20% and fixed-charge coverage above 11x through 2027. As of the end of 2024, leverage stood at 15% and coverage at 21x. Liquidity was described as exceptional, supported by high cash balances and a portfolio of highly rated, short-dated bonds.
The stable outlook reflects S&P’s expectation that Ascot will sustain strong capital adequacy, continue to generate sound underwriting results, and maintain its financial profile in line with the current assessment.
A downgrade could occur within the next two years if capitalisation were to fall below the 99.99% confidence threshold due to large underwriting or investment losses or weaker operating results.
Conversely, an upgrade is viewed as unlikely in the near term, with any longer-term positive action requiring growth and diversification beyond peers while consistently keeping capital well above S&P’s standards.
“We are very pleased with the S&P ratings upgrade. It is a considerable milestone and a strong testament to the successful execution of our strategic plans as we continue to grow a profitable, world-class global specialty company,” commented Jonathan Zaffino, Ascot Group CEO and President.
“We believe this upgrade reflects our disciplined underwriting and portfolio management, and the financial strength and stability Ascot has built to successfully pursue our mission to be a perfect partner for a less-than-perfect world.”
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