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FOR IMMEDIATE RELEASE
OLDWICK - JULY 14, 2023 09:51 AM (EDT)
AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of Accredited Specialty Insurance Company (ASI) (Phoenix, AZ), Accredited Surety and Casualty Company, Inc. (ASC) (Orlando, FL) and Accredited Insurance (Europe) Limited (AIEL) (Malta), collectively known as Accredited.
Concurrently, AM Best has downgraded the Long-Term ICR to “bb” (Fair) from “bbb-” (Good) of R&Q Insurance Holdings Ltd (R&Q) (Bermuda) [AIM: RQIH], the non-operating holding company of the overall R&Q group; the Accredited members are wholly owned subsidiaries of R&Q. AM Best has withdrawn this Long-Term ICR as R&Q has requested to no longer participate in AM Best’s interactive rating process. At the time of the withdrawal, this rating was under review with negative implications.
The rating of R&Q reflected its status as the ultimate non-operating holding company of the group, and was notched down from AM Best’s assessment of the lead rating unit, which represents the consolidated R&Q group. The downgrade of R&Q’s rating follows it reporting an IFRS loss of USD 297 million for 2022, resulting in a decline in its reported capital and surplus by over 50% at year-end 2022. The assessment considers subsequent actions taken by management to strengthen the R&Q group’s balance sheet, along with expected improvements that are likely following the planned divestment of the Accredited sub-group.
Accredited is assessed as a separate non-lead rating unit of the R&Q group. The ratings reflect Accredited’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings reflect a neutral impact from the sub-group’s ownership by R&Q. Despite pressure on R&Q’s rating fundamentals, AM Best considers Accredited’s balance sheet to be somewhat insulated over the near term.
The ratings of Accredited will remain under review until AM Best has sufficient clarity over the rating fundamentals of the entities, subsequent to the sale of Accredited. The negative implications reflect execution risk related to Accredited’s planned divestment. The failure of R&Q to effectively dispose of Accredited would likely result in negative rating pressure for Accredited.
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 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.