The ratings of Global Indemnity Re are based on the consolidated results of the company and its six
The ratings also take into consideration initiatives introduced in 2011, the benefits gained from these actions, its increasingly diverse book of business and the advantages of multi-distribution channels and its long-standing agency/broker relationships. These positive ratings factors are offset by competitive pricing pressures in
The strong capital position continues to reflect ample support for the company’s prospective premium growth, including the acquisition of
Upon its acquisition of American Reliable in 2015, Global Indemnity Re immediately gained immediate access to more than
These positive attributes are tempered by competitive (re)insurance and retro pricing pressures, high underwriting expenses and increasing risk in the investment portfolio. Since 2011, management has been implementing an enterprise-wide emphasis on premium adequacy and underwriting profitability. Recent premium contraction through 2012 reflects the orderly discontinuation of unsatisfactory agency relationships and the elimination of certain unprofitable classes of business. A higher-than-average expense ratio is offset by the quality of business sourced though its select distribution partners. While the company continues to prudently reinvest its fixed income portfolio in high quality securities, it is beginning to pursue a modest amount of higher alternative investments.
Positive rating actions could occur if the company can demonstrate sustainable fundamental operating results at levels that exceed that of its peers while maintaining risk-adjusted capital thresholds that are supportive of the ratings. Downward pressure on the ratings or rating outlooks could result if there is material deterioration in the organization’s risk-adjusted capital or a significant decline in underwriting and operating performance, brought on by aggregate catastrophe losses, significant unanticipated loss reserve development, a sudden shift in the group’s business strategy or the loss of a major distribution partner. Any of these events, or a combination of events, could result in negative rating pressure.
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed for
American Reliable Insurance Company
Diamond State Insurance Company
Penn-America Insurance Company
Penn-Patriot Insurance Company
Penn-Star Insurance Company
United National Insurance Company
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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