CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 24, 2020 09:02 AM (EDT)
AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Spinnaker Insurance Company (Spinnaker) (Chicago, IL). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Spinnaker’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings actions follow the closing by Hippo Enterprises Inc. (Hippo) of its acquisition of Spinnaker on Aug. 31, 2020, as well as discussions with management related to the organization’s post-transaction capital structure. The acquisition solidifies the relationship between Spinnaker and Hippo, which have had a working relationship since 2017.
Spinnaker’s rating affirmations are attributable to its strongest level of risk-adjusted capitalization, a positive trend in operating performance and experienced management team. The ratings further consider the financial and operational benefits that Spinnaker may receive as part of a larger organization, including anticipated access to capital support and technology resources from Hippo. Finally, the ratings recognize the equity-like characteristics of Hippo’s capitalization with primarily convertible preferred stock, the parent’s adequate liquidity position pro forma for the Spinnaker acquisition and its ongoing capital support from investors. Conversely, negative rating actions could occur if there is a material deterioration in Hippo’s balance sheet strength, operating performance or liquidity profile, including its ability to raise additional capital.
The stable outlook assigned to the ratings primarily reflects AM Best’s expectation that Spinnaker’s operating performance will remain profitable in the near term, and that its balance sheet strength will remain supportive of the current ratings level.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.