Vantage expected to post 2023 operating profit

Bermuda-based Vantage Group is expected to post its first operating profit in 2023 as the company had grown and volatility from property catastrophe underwriting has been reduced, according to AM Best.

The ratings agency said Vantage, which has been in operation for three years and was founded by re/insurance veteran Greg Hendrick, was hit by elevated catastrophe losses in 2021 and 2022 but has grown to scale. The agency affirmed the company's A- financial strength rating with a stable outlook. 

"In the first two years, underwriting income was adversely impacted by elevated catastrophe losses; however, as Vantage Group has continued to grow to scale in 2023 and moved property catastrophe business off its balance sheet through its insurance-linked securities vehicle, AdVantage Retro I Ltd., its underwriting results have improved," the agency said. 

"AM Best expects full year combined ratios for 2023 to benefit from these changes and track closer to breakeven, leading to the group’s first full year of operating profitability. This strategy is expected to provide Vantage Group with accretive income while continuing to reduce volatility in its operating results in future years."

The agency added that Vantage's insurance operations have grown more slowly than reinsurance but is now relatively larger than the reinsurance portfolio. 

"While Vantage Group’s diversification and capabilities have expanded significantly since launch, some level of operational risks remains as new business seasons," the agency said. "AM Best will continue to monitor the group’s progression as it enters its fourth year of operation. AM Best anticipates that Vantage Group’s operating performance will continue to improve as its business plan is executed." 

In addition to Vantage Risk (Bermuda), Vantage has two affiliates domiciled in Delaware. 

AM Best said the ratings reflected Vantage Group’s balance sheet strength, which AM Best assessed as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.