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Best’s News & Research Service - January 21, 2022 11:59 AM (EST)

AM Best Assigns Credit Ratings to Accelerant Re Ltd.; Affirms Ratings of Accelerant Holdings (Cayman) Ltd.’s Rated Subs

  • January 21, 2022 11:59 AM (EST)
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London //BestWire// - AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to Accelerant Re Ltd. (Accelerant Re) (Bermuda). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Accelerant Insurance Europe SA (AIE) (Belgium), Accelerant Specialty Insurance Company (ASIC) (Little Rock, AR) and Accelerant National Insurance Company (ANIC) (Wilmington, DE). The companies are wholly owned subsidiaries of Accelerant Holdings (Cayman) Ltd. (Accelerant), the non-operating holding company of the Accelerant group. The outlook of these ratings is stable.

The ratings reflect the consolidated balance sheet strength of Accelerant, which AM Best assesses as very strong, as well as Accelerant’s adequate operating performance, limited business profile and appropriate enterprise risk management.

In AM Best’s view, Accelerant Re, AIE, ASIC and ANIC are strategically important to and integrated within Accelerant. AIE, ASIC and ANIC play a key role in the group’s strategy of providing insurance capacity to managing general agents (MGAs) in the United Kingdom, the European Union and the United States. Accelerant Re is the group’s internal reinsurer.

Accelerant’s balance sheet strength is underpinned by risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), that is expected to be maintained at the strongest level as the group grows, taking into account AM Best’s additional capital requirements for new company formations. In December 2021, the group raised USD 162 million from external investors, prefunding its growth plans and demonstrating financial flexibility. The group remains highly reliant on reinsurance, given its low retention, but has further diversified its reinsurance panel since launch, reducing dependence on any single reinsurance partner.

Accelerant reported a net loss after tax for 2020, largely due to non-recurring items; however, AM Best expects earnings to improve significantly in future periods. Whilst the group has exceeded its initial growth targets and demonstrated early indications of market acceptance, its business profile remains limited, reflecting the absence of an established market position and its small scale, at present.

The ratings of Accelerant Insurance Limited (AIL) (Malta) have been withdrawn following the surrender of the company’s licence, with AIE becoming the group’s primary carrier for business from the United Kingdom and the European Union.

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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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