Best’s News & Research Service - March 03, 2016 02:08 PM (EST)
A.M. Best Affirms Ratings of Pinnacle Consortium of Higher Education, A Vermont Reciprocal Risk Retention Group
Oldwick //BestWire// - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Pinnacle Consortium of Higher Education, A Vermont Reciprocal Risk Retention Group. (Pinnacle) (Burlington, VT). The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Genesis Limited (Genesis), an affiliated Bermudian insurer, as a result of the merger of Genesis into Pinnacle, effective Jan. 1, 2015.
The ratings of Pinnacle reflect the company’s sound capitalization, strong historical operating results and niche market expertise. These positive rating factors are derived from the discontinuation of the Genesis operation and the transfer of all its assets and liabilities to Pinnacle. Pinnacle continues its conservative operating strategy, which includes very discretionary member admission and an investment program characterized by a portfolio dominated by high quality fixed income securities. These positive rating factors are partially offset by the company’s susceptibility, as an excess carrier, to infrequent but significant losses. This has led to occasional underwriting loss results in recent years. The company also has a stable but small number of insured members, which limits the amount of its risk distribution. A.M. Best is of the opinion that Pinnacle benefits from the dedicated attention of management to ensure the sound operation of the company and provide consistent operating profitability.
Since its founding in 1980, Genesis and going forward, Pinnacle, have provided for their member colleges and universities a stable market to purchase automobile liability and general liability protection. The company currently offers these coverages to 17 member insureds. The company conducts an annual review of the current status and projected loss experience of each member’s program. The members receive an appropriate dividend or assessment based on experience, in accordance with the subscribers’ agreement. All of its members are located in the United States.
The outlook of Pinnacle’s ratings could be revised upward if the company’s operating performance improves and risk-adjusted capital remains supportive of the ratings. Negative rating impact could occur if underwriting performance shows a decline and demonstrates volatility that impacts negatively on earnings and capitalization over time. Negative rating impact also could occur if there is a material shift in Pinnacle’s risk profile that could potentially undermine the stability and profitability of the company.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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 see A.M. Best’s Recent Rating Activity web page.
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