AM Best Assigns Credit Ratings to Accelerant Insurance Company of Canada; Affirms Credit Ratings of Accelerant Holdings’ Rated Subsidiaries
May 16 2024 - 9:32AM
Business Wire
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 Insurance Company of Canada (AIC)
(Canada). The outlook assigned to these Credit Ratings (ratings) is
stable. Concurrently, AM Best has 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) and Accelerant Re
(Cayman) Ltd. (Accelerant Re Cayman) (Cayman Islands). The
companies are wholly owned subsidiaries of Accelerant Holdings
(Accelerant), a non-operating holding company in the Accelerant
group. The outlook of these ratings is stable.
The ratings reflect the consolidated balance sheet strength of
Accelerant, which AM Best assesses as very strong, as well as the
group’s adequate operating performance, limited business profile
and appropriate enterprise risk management.
In AM Best’s view, AIE, AIUK, ASIC, ANIC, AIC and Accelerant Re
Cayman 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. Accelerant Re Cayman is a reinsurer and is
strategically important to the group’s reinsurance and capital
management strategy. Accelerant’s licensed (re)insurance carriers
benefit from net worth maintenance agreements with the holding
company.
Accelerant was established in 2019 and offers underwriting,
claims handling and analytical support to its MGA partners.
Accelerant reported gross written premium of over USD 1.6 billion
in 2023, supported by shareholders’ equity of over USD 300 million
and senior debt of approximately USD 120 million, as of December
2023.
Accelerant’s balance sheet strength is underpinned by
consolidated risk-adjusted capitalisation that is expected to
remain at the strongest level, as measured by Best’s Capital
Adequacy Ratio (BCAR). The balance sheet strength assessment also
considers Accelerant’s good financial flexibility, low risk
investment portfolio and strong liquidity profile. The group has a
high dependence on reinsurance due to its strategy to retain a low
level of underwriting risk. The associated credit risk is mitigated
by the use of a diverse panel of financially strong counterparties
along with good quality collateral.
The adequate operating performance assessment considers
Accelerant’s business plan, taking into account heightened
execution risk. Earnings are expected to be supported by steady
fee-based income arising from the group’s risk exchange related
activities. Furthermore, AM Best expects the group to generate
profitable underwriting returns over the longer term, reflective of
the good historical performance of its MGA members. As Accelerant’s
strategy has evolved, the group has incurred elevated one-off
expenses that resulted in operating losses in recent years.
Nevertheless, AM Best expects Accelerant to generate profitable
overall results once the business is scaled fully.
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 specialising 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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Todor Kitin Senior Financial Analyst, ACA +44
20 7397 6264 todor.kitin@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
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0320 tim.prince@ambest.com
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908 882 2318 alslavin@ambest.com