A.M. Best Affirms Credit Ratings of Spirit Insurance Company and Radius Insurance Company
The ratings reflect Spirit and Radius’ balance sheet strength, which
The balance sheet strength is supported by risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), consistently favorable loss development and high liquidity. Business is written separately by Spirit and Radius, and each company has a history of strong underwriting results and operating returns, with most return metrics outpacing the composite.
The business profile assessment reflects the position they hold as the captive insurers for their ultimate parent,
The captives’ underwriting risks largely consist of onshore and offshore property and liability business. Spirit provides property damage, business interruption and excess liability insurance to
Partially offsetting rating factors are Spirit and Radius’ exposure to large losses due to the limits offered on their respective policies and their significant dependence on reinsurance protection. In addition, Spirit’s terrorism risk exposure remains relatively high on a gross basis. Although the majority of Spirit’s capital is loaned to its parent, there is limited counterparty risk due to the affiliation of the two companies and the alignment of interests. Additionally, Spirit provides terrorism coverage to its parent. While terrorism risk exposure remains relatively high on a gross basis, concerns are mitigated by reinsurance protection afforded by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA). However, due to the temporary nature of TRIPRA,
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. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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