AM Best Affirms Credit Ratings of Global Indemnity Limited and Its Subsidiaries
OLDWICK, N.J.--(BUSINESS WIRE)--Jan 8, 2019--AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of Global Indemnity Reinsurance Company, Ltd. (Global Indemnity Re) (Hamilton, Bermuda) and its U.S. subsidiaries. Concurrently, AM Best has affirmed the Long-Term ICR of “bbb” of Global Indemnity Re’s ultimate parent holding company, Global Indemnity Limited (Global Indemnity) (Cayman Islands) [NASDAQ: GBLI].
Additionally, AM Best has affirmed the Long-Term Issue Credit Rating (Long-Term IR) of “bbb-” on Global Indemnity’s $100 million 7.75% subordinated notes offering due 2045, and the $130 million 7.875% subordinated note offering due 2047, as well as the indicative Long-Term IRs on its shelf registration of “bbb” on senior unsecured debt, “bbb-” on subordinated unsecured debt and “bb+” on the preferred stock. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies.)
The ratings reflect Global Indemnity Re’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The balance sheet strength assessment is based on Global Indemnity Re’s BCAR score at the strongest level supported by a conservative investment portfolio, conservative reserving practices and added financial flexibility through its access to the capital markets. Through its six member intercompany pool, the group targets a diverse mix of specialty niche business that is generally not offered in the standard insurance marketplace. Each company serves a specific market or distribution channel, which provides the group access to a substantial amount of commercial and personal lines business in the United States. U.S.-sourced business accounts for the largest share of the group’s revenues.
The group’s operating earnings has performed generally in line with its peers over the past five years, although catastrophe losses dampened its earnings in 2017 and 2018. The acquisition of American Reliable Insurance Company (American Reliable) in 2015 nearly doubled its writings, but at the same time also significantly increased its U.S. property exposures. AM Best believes that ongoing execution of management’s recently implemented initiatives should continue to positively impact underwriting and operating results going forward.
Positive rating actions could occur if the company can demonstrate sustainable fundamental operating results at levels that exceed that of its peers while maintaining balance sheet strength at the strongest level. Downward pressure on the ratings or outlooks could result if there is material deterioration in the organization’s risk-adjusted capital or a significant decline in underwriting and operating performance, brought on by aggregate catastrophe losses, significant unanticipated loss reserve development, a sudden shift in the group’s business strategy or the loss of a major distribution partner.
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed with stable outlooks for Global Indemnity Reinsurance Company, Ltd. and its following subsidiaries:American Reliable Insurance Company Diamond State Insurance Company Penn-America Insurance Company Penn-Patriot Insurance Company Penn-Star Insurance Company United National Insurance Company
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view .
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KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: AM Best
Copyright Business Wire 2019.
PUB: 01/08/2019 03:15 PM/DISC: 01/08/2019 03:15 PM