Best’s News & Research Service - October 29, 2019 01:40 PM (EDT)
AM Best Assigns Credit Ratings to LOTS Reassurance Company
- October 29, 2019 01:40 PM (EDT)
Oldwick //BestWire// - AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to LOTS Reassurance Company (LOTS Re) (Turks and Caicos). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect LOTS Re’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). LOTS Re’s ratings benefit from the support of its parent, Fortegra Financial Corporation (FFC). The lead rating unit of this organization is Fortegra P&C Group (Fortegra).
LOTS Re is a Turks and Caicos-incorporated subsidiary of FFC, a U.S. insurance group specializing in credit and warranty business. In 2016, LOTS Re entered into an intercompany reinsurance agreement with other U.S. insurance subsidiaries of FFC to assume a portion of their premiums.
LOTS Re’s adequate balance sheet assessment reflects the organization’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) as of Dec. 31, 2018. Also contributing to the balance sheet assessment is the company’s diverse blend of fixed income securities, equity holdings, BA assets, and other investments, as well as its stable loss reserving trends as a captive reinsurer for Fortegra since 2016.
LOTS Re’s operating performance is assessed as adequate due to its profitable operating results since becoming a captive reinsurer of Fortegra, and reasonable performance projections through 2020. LOTS Re’s business profile is assessed as limited due to its primary function as a captive reinsurer for FFC. LOTS Re’s ERM is assessed as appropriate due to the organization’s shared management framework with Fortegra.
LOTS Re shares management with its parent, and AM Best expects LOTS Re to play a strategically important role in FFC’s global insurance operations. AM Best considers FFC to have satisfactorily demonstrated its willingness to provide capital to its subsidiaries whenever necessary, and expects that willingness to continue.
AM 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 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 Understanding 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.
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