FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 08, 2024 05:10 PM (EST)
AM Best has placed under review with negative implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of SILAC Insurance Company (SILAC) (Salt Lake City, UT).
The Credit Ratings (ratings) of SILAC have been placed under review with negative implications primarily due to a decline in the quality of one of its reinsurance counterparties and the quality of investments that it holds as collateral. As a result of these factors, as well as increasing reinsurance leverage over the past year, AM Best has noted a decline in SILAC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). SILAC has entered into several reinsurance agreements with unrated reinsurers and maintains relatively high reinsurance leverage.
While SILAC’s capital and surplus has grown over the past year due to the retention of favorable earnings and capital contribution from investors, risk-adjusted capitalization is assessed as weak, as measured by BCAR. AM Best also notes the somewhat limited financial flexibility of SILAC should additional capital be needed to fund new growth or replenish capital due to investment impairments or the recapture of ceded business. The ratings will remain under review until AM Best can fully assess the company’s strategic and capital plans.
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 Performance Assessments, 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 specializing 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.