AM Best affirms Everen Specialty’s financial strength rating
AM Best has affirmed the financial strength rating of A- (‘excellent’) and the long-term issuer credit rating of a- (‘excellent’) of Everen Specialty, formally known as Oil Casualty Insurance. AM Best also has affirmed the long-term issue credit rating of bbb (‘good’) on the $200 million, 8 percent deferrable subordinated debentures, due September 15, 2034. The outlook of these ratings is stable.
The ratings reflect Everen Specialty’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
Everen Specialty’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, in the “very strong” range, though overall capital levels have been in decline over the past five years. Capitalisation has remained sufficient, AM Best said, to support the company’s strategic diversification efforts. Everen Specialty’s diversification efforts have supplemented its primary mission as a stable capacity provider for the energy industry.
“Everen Specialty’s underwriting performance has been volatile over the prior five years, as the company experiences occasional shock losses. However, the company does use retrocessional reinsurance and limit management cover to mitigate its exposures,” AM Best said.
“Everen Specialty’s reinsurance programme has been proven effective in dampening volatility. Investment returns have been accretive to the company’s results in four of the past five years (2021 through 2017),” it added.
