OREANDA-NEWS. S&P Global Ratings said today that it affirmed its 'BBB-' long-term counterparty credit rating on U. S.-based intermediary holding company Argo Group US Inc. (AGUS) and its 'A-' long-term counterparty credit and financial strength ratings on AGUS's core U. S. operating insurance subsidiaries (together, Argo). AGUS is a wholly owned subsidiary of Bermuda-based insurance and reinsurance holding company Argo Group International Holdings Ltd. (NASDAQ:AGII). The outlook is stable.

"The ratings reflect our view of the consolidated group's strong business risk and financial risk profiles based on its strong competitive position and very strong capitalization, partially offset by its moderate risk position," said S&P Global Ratings credit analyst Hardeep Manku. The ratings are further supported by our satisfactory assessment of management and governance and enterprise risk management (ERM) that is adequate with strong risk controls.

We have revised our assessment of ERM to adequate with strong risk controls from adequate based on our positive view of risk controls. This view reflects consistency in underwriting actions that have translated into improved operating results and a track record of controls around prudence in reserve estimates and improving risk controls for catastrophe risk.

The outlook is stable, reflecting the group's ability to maintain its strong competitive position and very strong capital and earnings, as well as our expectation that management will sustain and slightly improve operating results and expense structure during the next couple of years. We also expect the group to further enhance its ERM framework during this time.

We do not expect to take a positive rating action in the next 24 months. We could consider an upgrade if:ERM strengthens to strong;Our view of the group's competitive position strengthens substantially relative to its higher rated peers; orCapitalization sustainably improves to extremely strong. We could take negative rating actions during the next 24 months if:The group's operating results are significantly weaker than our expectations and management's targets or are substantially worse than its peers', highlighting that the gains in underwriting might not be sustainable;Its ERM capabilities deteriorate materially or are not in line with the group's risk profile; orCapitalization declines significantly.