Best’s News & Research Service - July 09, 2015 09:14 AM (EDT)
A.M. Best Affirms Ratings of ProSight Global Holdings Limited and Its Subsidiaries
Oldwick //BestWire// - A.M. Best has affirmed the issuer credit rating (ICR) of "bbb" of ProSight Global Holdings Limited (ProSight Global Holdings). In addition, A.M. Best has affirmed the financial strength ratings of A (Excellent) and the ICRs of "a" of New York Marine and General Insurance Company and its wholly owned subsidiaries, Gotham Insurance Company and Southwest Marine & General Insurance Company (collectively referred to as the ProSight Specialty Group).
Concurrently, A.M Best has affirmed the ICR of "bbb" and the debt ratings of "bbb" on the $140 million 7.5% senior unsecured notes due November 2020 and the $25 million 6.5% senior unsecured notes due November 2020 of ProSight Global, Inc. (ProSight Global). These notes are guaranteed by ProSight Global Holdings. The outlook for all ratings is stable. All companies are headquartered in Morristown, NJ.
The ratings reflect ProSight Specialty Group's supportive level of risk-adjusted capitalization, improved operating performance since 2012 and strong market niche position in its core specialty lines of business. The ratings also recognize the strength of the senior management team and the progress the team has made in repositioning the business and improving results since the group's acquisition in 2010.
Offsetting these positive rating factors are ProSight Specialty Group's elevated underwriting expense ratio, limited organic surplus growth over the most recent five-year period and the risks associated with the growth and maturation of new business. Further, pre-tax operating losses were experienced in 2010 and 2011 as the intentional run-off of less profitable programs coupled with increased expenditures took place during that timeframe.
ProSight Global Holdings' debt to capital, as of Dec. 31, 2014, is approximately 26% and falls within the guidelines for the current rating level. Additionally, ProSight Global Holdings maintains adequate resources to cover the required interest payments.
The stable outlook takes into account A.M. Best's expectation that ProSight Specialty Group will maintain its adequate level of risk-adjusted capitalization and generate operating profits throughout market cycles.
Negative rating actions may occur if ProSight Specialty Group has a decline in underwriting profitability or a considerable deterioration in its risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio. Positive rating movement may occur after several years of demonstrated earnings sustainability in line with A.M. Best's expectations.
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
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