OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Securian Specialty Lines, Inc. (Securian Specialty) (Macon, GA). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Securian Specialty’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 (ERM).
The ratings also consider Securian Specialty’s role as a member of Securian Financial Group, Inc. Securian Specialty is a newly formed surplus lines carrier and is a wholly owned subsidiary of Securian Casualty Company (Securian Casualty). Initially, Securian Specialty plans to offer products adjacent to what Securian Casualty currently offers to lenders. The business plan calls for an expansion to all 50 states over the next five years and Securian Specialty will leverage Securian Casualty’s existing distribution network, as well as new distributors.
Securian Specialty’s very strong balance sheet strength is underpinned by projected strongest risk-adjusted capitalization, as measured by Best Capital Adequacy Ratio (BCAR), and a sound business plan for the next five years. Operating performance metrics are expected to be comparable with those of the credit composite average, while an underwriting loss is expected during the implementation phase.
The ratings also consider the execution risk inherent in start-up organizations and the potential challenges management faces to execute on the business plan. Securian Specialty will enjoy the benefits of Securian Financial Group, Inc.’s resources including legal, ERM and asset management, which partially mitigates this risk. The company will share Securian Casualty’s management team, which has a demonstrated and sound understanding of its chosen markets.
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