AM Best Assigns Credit Ratings to Emerald Bay Specialty Insurance Company
March 28 2024 - 11:52AM
Business Wire
AM Best has assigned a Financial Strength Rating of A-
(Excellent) and a Long-Term Issuer Credit Rating of “a-”
(Excellent) to Emerald Bay Specialty Insurance Company (EBSIC)
(Tucson, AZ). The outlook assigned to these Credit Ratings
(ratings) is stable.
The ratings reflect EBSIC’s balance sheet strength, which AM
Best assesses as very strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
EBSIC is an Arizona-domiciled hybrid fronting company operating
in the surplus lines market throughout the United States. As such,
the company’s strategy involves maintaining a significant risk
position in the programs it writes. EBSIC’s ultimate parent is
Emerald Bay Risk Solutions, LLC (Emerald Bay) and Emerald Bay will
be owned primarily by Bain Capital Insurance (BCI).
EBSIC’s balance sheet strength assessment is driven by the
company’s risk-adjusted capitalization, as measured by Best’s
Capital Adequacy Ratio (BCAR), which is expected to be in the
strongest range throughout the company’s initial five-year business
plan. The balance sheet strength is underpinned further by a
conservative investment profile and the backing of BCI. BCI has
committed significant equity into the company to support the
start-up operations and has assisted EBSIC’s ultimate parent,
Emerald Bay, in sourcing a term loan credit facility as part of the
initial funding of EBSIC.
AM Best assesses EBSIC’s operating performance as adequate as
the company’s underwriting guidelines are anticipated to produce
profitable operating results over the intermediate term.
Additionally, the company’s initial portfolio will include
third-party programs where management has developed deep expertise
through previous collaborations. AM Best assesses EBSIC’s business
profile as limited given the start-up nature of the company’s
operations. However, AM Best notes that management has a strong
track record of operating in the insurance and fronting markets,
which reduces execution risk. AM Best assesses EBSIC’s ERM
framework as appropriate with clear strategic objectives well
aligned with the company’s risk appetite. Moreover, there is a
robust risk monitoring and governance structure in place to ensure
accountability and oversight throughout the organization.
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 Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best's
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Cristian Sieira Financial Analyst +1 908 882
2315 cristian.sieira@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Greg Williams Senior Director +1 908 882
2434 greg.williams@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com