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S&P Upgrades ACE's Rating

Source: MarketWatch

Posted on 13 Dec 2010

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Stating that ACE Ltd. has "substantially met or exceeded" all of the ratings agency's expectations since the outlook was revised to positive in late 2008,  Standard & Poor's Ratings Services lifted its rating on the insurer.

Factors supporting the upgrade include the group's very strong and consistent operating performance, very strong competitive position, positive management and corporate strategy, and improved financial flexibility.

The group also benefits from strong enterprise risk-management practices, which also support the ratings.

ACE's profit has been very strong in the past five years, according to S&P.

"These results are better than those of many global insurance and reinsurance peers during the same period," said analyst Laline Carvalho. "In addition, ACE's diversified platform has contributed to the group's lower earnings volatility than many of its peers' in recent years."

S&P lifted the company's counterparty credit rating by a notch to A, which is five levels into investment-grade territory. The outlook is now stable, reflecting S&P's view of limited further upside potential to the ratings in the near term, though it believes the company will maintain a very strong global competitive position and very strong operating performance.

In October, ACE reported its third-quarter earnings improved on narrower realized investment losses, while the company's core profit fell less than analysts predicted.