AM Best assigns ratings to Ategrity Specialty Holdings and subsidiaries

AM Best has assigned a financial strength rating of A- (Excellent) and long-term issuer credit ratings (Long-Term ICR) of “a-” to Ategrity Specialty Insurance and Bermuda-domiciled Sequentis Reinsurance.

AM Best has assigned a long-term ICR of “bbb-” to their holding company, Ategrity Specialty Holdings. The outlook assigned to all credit ratings is stable. The long-term ICR of Ategrity is based on the operating companies’ long-term ICRs, as outlined in Best’s credit rating methodology. Both Ategrity and ASIC are domiciled in Delaware, USA.

The rating agency said that the ratings reflect Ategrity’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate projected operating performance, limited business profile and appropriate enterprise risk management.

Ategrity’s very strong balance sheet assessment is based on a capitalisation level that meets AM Best’s requirements for newly formed companies, supportive projected risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, and a clearly-defined business plan, which contemplates a reasonable degree of execution risk as a newly formed company. A portion of the company’s assets will be managed by Zimmer Partners, a multibillion-dollar investment advisor based in New York that is registered with the Securities and Exchange Commission.

AM Best said that Ategrity – through its US operating subsidiary, ASIC – intends to write excess and surplus lines of business and is projecting strong underwriting profitability, supplemented by healthy investment income, generated by its investment portfolio. As with any start-up company, Ategrity’s operating profitability depends on senior management’s ability to execute the company’s business plan. Negative rating pressure could occur if Ategrity's operating performance is weak or materially below projections and if the company experiences significant underwriting or investment losses, which could contribute to an overall deterioration in risk-adjusted capitalisation. Based on the projections provided by the company, overall anticipated operating performance is assessed as adequate by AM Best.