OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Calais Reciprocal Insurance Exchange (CIE) (Springfield, IL). Concurrently, AM Best has assigned a Long-Term Issue Credit Rating of “bbb” (Good) to the $85 million, 7% surplus notes, due May 2040, and the $15 million, 7.0% surplus notes, due May 2040 issued by CIE. The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect CIE’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The very strong balance sheet strength assessment reflects CIE’s strongest level of projected risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and reasonable business plan, which includes conservative reserving and investment strategies, along with a comprehensive reinsurance program comprised of a diverse panel of highly rated reinsurers. Partially offsetting these strengths is CIE’s high financial leverage due to the initial capitalization via surplus notes and its exposure to catastrophe losses.
AM Best assesses CIE’s operating performance as adequate based on its projections. CIE is expected to benefit from the full breadth of AmRisc Group’s (AmRisc) operational experience. AmRisc will manage all underwriting and core operations of the exchange via a service agreement with the exchange’s attorney-in-fact manager. AM Best views CIE’s business profile as neutral given AmRisc’s extensive experience in coastal property underwriting. CIE will serve the property catastrophe market and write excess and surplus (E&S) business nationwide. The E&S book will include general property, difference in conditions/earthquake, builder’s risk, national accounts and technical risks, all written through AmRisc’s unique syndicated capacity model.
While there is execution risk in implementing the business plan, it is tempered by the demonstrated track record and available resources provided by AmRisc. CIE will benefit from the established ERM program in place at AmRisc and CRC Insurance Group, LLC (CRC Group) . ERM will be conducted at the enterprise level, managed by CRC Group, and cascade down to CIE. As is customary, AM Best will closely monitor CIE’s actual results relative to its plan.
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.
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Contacts
Christine DePalma, CPCU, ASLI
Financial Analyst
+1 908 882 1732
christine.depalma@ambest.com
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Director
+1 908 882 1903
edin.imsirovic@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
