AM Best

A.M. Best Assigns Credit Ratings to Vault Reciprocal Exchange


Christopher Draghi
Financial Analyst
+1 908 439 2200, ext. 5043

Richard Attanasio
Senior Director
+1 908 439 2200, ext. 5432

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - OCTOBER 12, 2017 12:05 PM (EDT)
A.M. Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Vault Reciprocal Exchange (Vault) (St. Petersburg, FL). The outlook assigned to these Credit Ratings (ratings) is stable.

The assigned ratings reflect Vault’s appropriate level of risk-adjusted capitalization, which supports the underwriting, credit and investment risks of the company. The company’s business plans consist of writing high-net-worth homeowner coverage in Florida, New York, New Jersey, South Carolina and Connecticut in the first year of operation. Focus will be to grow the Florida business at the onset, with this state remaining a material part of the book of business in future years. While strict risk selection criteria and underwriting guidelines are in place, the concentration of property business and corresponding dependence on reinsurance are significant risk factors. Although untested, sophisticated pricing is in place.

Vault is sponsored by Allied World Assurance Company Holdings, GmbH (Allied World), which provides capital, operational and reinsurance support. Allied World also provides strategic support with control of the board of directors at the attorney-in-fact, Vault Risk Management Services, LLC. The ratings and outlooks consider the substantial support provided by Allied World. Accordingly, the successful execution of Vault’s business development plans is dependent on its strategic business partners. Additionally, the ratings reflect Vault’s comprehensive reinsurance program, which is designed to mitigate the impact of not only a single significant hurricane, but also multiple catastrophe weather events. Based on management’s near-term financial plan, its projected probable maximum loss is at an appropriate level relative to surplus.

Future positive rating actions could occur for Vault following demonstrated successful implementation of its business plans as well as several periods of profitable results, which will strengthen risk-adjusted capitalization. Negative rating actions could result if the operational and financial plans anticipated by management do not materialize, resulting in a decline in risk-adjusted capitalization. In addition, negative rating action also could result from a material change in the relationship and support provided by Allied World.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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