Accelerant Re wins excellent rating
AM Best has given new Bermudian reinsurer Accelerant Re an A- (Excellent) financial strength rating and a long-term issuer credit rating (ICR) of “a-” (Excellent), with a stable outlook.
It also affirmed the FSR of A- (Excellent) and the long-term ICR of “a-” (Excellent) of Accelerant Holdings (Cayman) subsidiaries Accelerant Insurance Europe SA (AIE) (Belgium), Accelerant Specialty Insurance Company (ASIC), (Little Rock, AR) and Accelerant National Insurance Company (ANIC). They were, again, given a stable outlook.
The ratings reflect the very strong consolidated balance sheet strength of Accelerant, as well as its “adequate operating performance, limited business profile and appropriate enterprise risk management”, the ratings agency said.
“In AM Best’s view, Accelerant Re, AIE, ASIC and ANIC are strategically important to and integrated within Accelerant. AIE, ASIC and ANIC play a key role in the group’s strategy of providing insurance capacity to managing general agents (MGAs) in the United Kingdom, the European Union and the United States. Accelerant Re is the group’s internal reinsurer,” its analysis reads.
Accelerant’s balance sheet strength was underpinned by its risk-adjusted capitalisation, at the strongest level, according to Best’s capital adequacy ratio (BCAR) as the group grows. This is expected to be maintained as the company grows. In December 2021, the group raised $162 million from external investors, “prefunding its growth plans and demonstrating financial flexibility”.
“The group remains highly reliant on reinsurance, given its low retention, but has further diversified its reinsurance panel since launch, reducing dependence on any single reinsurance partner,” Best added.
Following reported net losses after tax for 2020, Best expects earnings to improve significantly in future periods. “Whilst the group has exceeded its initial growth targets and demonstrated early indications of market acceptance, its business profile remains limited, reflecting the absence of an established market position and its small scale, at present,” it added.
