Credit rating agency AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to Accelerant Re I.I. (ARPR) (Puerto Rico), with a stable outlook.
Concurrently, AM Best affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of Accelerant Insurance Europe SA (AIE) (Belgium), Accelerant Insurance UK Limited (AIUK) (United Kingdom), Accelerant Specialty Insurance Company (ASIC) (Little Rock, AR), Accelerant National Insurance Company (ANIC) (Wilmington, DE), Accelerant Insurance Company of Canada (AIC) (Canada) and Accelerant Re (Cayman) Ltd. (ARKY) (Cayman Islands)
The outlook for all of these companies’ ratings, which are wholly owned subsidiaries of Accelerant Holdings, is stable.
According to AM Best, the stable outlook reflects the agency’s confidence in Accelerant’s consolidated balance sheet strength, which is assessed as “very strong”.
This assessment is underpinned by a number of factors, including consolidated risk-adjusted capitalization at the strongest level (as measured by Best’s Capital Adequacy Ratio – BCAR), adequate net underwriting leverage, favourable financial flexibility, and a conservative investment strategy.
“In AM Best’s view, AIE, AIUK, ASIC, ANIC, AIC, ARKY and ARPR are strategically important to, and integrated within, Accelerant. AIE, AIUK, ASIC, ANIC and AIC play key roles in the group’s strategy of providing insurance capacity to managing general agents (MGA) in the United Kingdom, the European Union and North America. ARKY and ARPR are reinsurers and are strategically important to the group’s reinsurance and capital management strategy. Accelerant’s licensed re/insurance carriers benefit from capital maintenance agreements with the holding company,” the agency added.
Although the company heavily relies on reinsurance due to its low retention, it has a proven track record of securing partnerships with highly reputable reinsurers.
Moreover, the company has significantly broadened its reinsurance panel since inception, which has helped to mitigate its dependence on any single partner.
AM Best concluded: “The group is expected to achieve consistent positive results in the near-to-medium term now that sufficient operating scale has been achieved. Accelerant has been substantially growing its top-line premium since its incorporation, with the business provided by its partner MGAs running at healthy average loss ratios, as per expectations.
“Operating performance is supported by the group’s agency business, which is the main contributor to the overall operating results. The group predominately sources its earnings from a steady distribution of commissions and fees, and the group’s underwriting results continue to improve.”
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