AM Best flags positive strategic changes at Vantage Risk

20-01-2023

AM Best flags positive strategic changes at Vantage Risk

AM Best has affirmed the Financial Strength Rating of A- of Vantage Risk (Bermuda). The outlook of the rating is stable.

The rating reflects Vantage Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings affirmation follows an active initial two years of operations for the group. Underwriting income was adversely impacted by elevated catastrophe losses in the group’s reinsurance operations for the second year in a row; however, AM Best expects projected combined ratios for 2022 to improve over 2021.

In response to the heightened volatility, the group has implemented a strategy to move property catastrophe business off its balance sheet but continue offering it through its insurance-linked securities (ILS) vehicles. This strategy is expected to provide Vantage with accretive income while reducing volatility in operating results.

The group continues to expand its primary insurance operations after a slow start in 2021 due to various operational challenges. As the group continues to execute on its business plans, the reinsurance portfolio will become relatively smaller than the primary portfolio and thus have less of an impact to the group’s bottom line.

AM Best will continue to monitor the group’s progression as it enters its third year of operation. AM Best anticipates that the group’s operating performance will begin to stabilize as its business plan is executed.

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