AM Best Affirms Ratings of Ardellis Insurance Ltd. - MarketWatch (press release)

OLDWICK, N.J., May 18, 2012 (BUSINESS WIRE) -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Ardellis Insurance Ltd. (Ardellis) (Bermuda). The outlook for both ratings is stable.

The ratings of Ardellis reflect its conservative underwriting leverage, strong level of capitalization and profitable operating results driven by its excellent underwriting performance.

Partially offsetting these positive rating factors are Ardellis' relatively high retention and limited profile as a single parent captive of Universal Forest Products Inc. (UFP). Ardellis provides coverage for general liability, auto liability, workers' compensation, property and certain employee health benefits. Ardellis has maintained very conservative underwriting leverage ratios as surplus has remained strong to support its business volume. The company has posted low loss and loss adjustment expense ratios, reflecting UFP's effective risk management. The ratings also recognize Ardellis' balance sheet strength and conservative underwriting leverage measures.

Rating drivers that could lead to a positive outlook or an upgrading of Ardellis' ratings are material and sustained improvement in its underwriting performance and capitalization. Additionally, improved overall risk management and reduced overall net exposure could lead to an upgrade.

Rating drivers that could lead to a negative outlook or a downgrading of the ratings are material deterioration of capital from either the company's claims or investments, a reduced level of capital that does not support the ratings or an increase in net retention.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world.

For current Best's Credit Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive .

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding Universal BCAR"; "Alternative Risk Transfer (ART)", "Evaluating non-Insurance Ultimate Parents", "Catastrophe Analysis in A.M. Best Ratings", and "Evaluating Country Risk." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com .

Copyright (C) 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

SOURCE: A.M. Best Co.

                            A.M. Best Co.            Janet Hernandez            Senior Financial Analyst            908-439-2200, ext. 5767            janet.hernandez@ambest.com            or            Steven Chirico, CPA            Assistant Vice President            908-439-2200, ext. 5087            steven.chirico@ambest.com            or            Rachelle Morrow            Senior Manager, Public Relations            908-439-2200, ext. 5378            rachelle.morrow@ambest.com            or            Jim Peavy            Assistant Vice President, Public Relations            908-439-2200, ext. 5644            james.peavy@ambest.com                    

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