The new Chubb organization's ratings recognize the group's comprehensive and proactive enterprise risk management, disciplined underwriting, global franchise recognition, strong risk-adjusted capitalization, profitable underwriting history, ingrained underwriting culture and capability, and experienced management team. The combined organization is expected to maintain the successful operating strategies of the legacy companies, which include consistent focus on underwriting profitability through careful risk selection and pricing, appropriate policy limits within the business model framework, and the use of reinsurance to manage net retained exposures at a level appropriate for the group's risk appetite. The group's strong enterprise risk management program is demonstrated by its ability to generate favorable income levels under challenging underwriting and investment conditions and should ultimately enable the group to successfully integrate its operations.Chubb Limited has historically maintained substantial capital levels in its Bermuda subsidiaries, which has benefited the group's balance sheet and provided rating enhancement to a number of Chubb affiliates through internal reinsurance arrangements. A.M. Best expects that the group's capital position, while diminished given the dividends paid to fund the transaction, will improve over time on the expectation of favorable underwriting and operating performance. These positive rating factors are partially offset by increased financial leverage at its ultimate holding company, a reduction in the group's risk-adjusted capital levels and the distraction a transaction of this size should reasonably be expected to cause. Additionally, competitive market conditions persist in the group's main business segments. The group is also exposed to natural and man-made catastrophe losses, asbestos and environmental (A&E) liabilities and at least in the short term, higher risk investments. However, all financial measures currently support the current ratings, as does A.M. Best's analysis of projected performance and capital levels. A.M. Best will continue to meet with the company periodically to discuss integration plans and monitor the operating performance and related integration success.
The ratings of Chubb Seguros Panama S.A. remain under review, pending meetings with management.The outlooks reflect A.M. Best's view that the company remains on track to successfully complete the integration of the organizations in accordance with management's plans, and is well-positioned to compete in a strained pricing environment. Factors that could lead to negative rating actions include a deterioration in the group's risk-adjusted capitalization as a result of dividend demands to service holding company needs which fall to a level that no longer supports the current ratings; an increase in Chubb's financial leverage beyond expectations; and execution risk associated with integration of entities and operations of all the Chubb companies. For a complete listing of Chubb's FSRs, ICRs and issue ratings, please visit Chubb Limited. This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best's Recent Rating Activity web page. A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.