OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of Ategrity Specialty Insurance Company (ASIC) and its affiliate, Sequentis Reinsurance Company Limited (Sequentis Re). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb-” of their holding company, Ategrity Specialty Holdings LLC (Ategrity). The outlook of these Credit Ratings (ratings) is stable. Ategrity and ASIC are domiciled in Wilmington, Delaware, USA, while Sequentis Re is domiciled in Hamilton, Bermuda.
The ratings reflect Ategrity’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate projected operating performance, limited business profile and appropriate enterprise risk management (ERM).
Ategrity exhibits a very strong level of balance sheet strength considering AM Best’s stringent requirements for newly formed companies, the execution risk inherent in the group’s operations and the group’s strongest projected risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).
The group’s liquidity measures are adequate. A significant portion of the company’s invested asset base is represented by an investment fund operated by Zimmer Partners, LP, a multi-billion dollar investment adviser based in New York and registered with the Securities and Exchange Commission. The balance of the invested asset base consists of high quality liquid investments, targeted to cover the group’s projected cash-flow requirements.
Ategrity, through its U.S. operating subsidiary, ASIC, began writing excess and surplus lines of business in the fourth quarter of 2018 and is projecting underwriting profitability, supplemented by healthy investment income generated by its investment portfolio. As with any start-up company, Ategrity’s operating profitability depends on senior management’s ability to execute the company’s business plan. Negative rating pressure could occur if Ategrity’s operating performance is weak or materially below projections, and if the company experiences significant underwriting or investment losses, which could contribute to an overall deterioration in risk-adjusted capitalization. Based on the projections provided by the company, and operating performance to date, AM Best assesses overall anticipated operating performance as adequate.
Ategrity will exhibit a limited business profile initially while its operations mature; however, the company’s seasoned senior management team plans to leverage its strong existing industry relationships to grow the business profitably and within its capital constraints. Additionally, Ategrity has developed a formal ERM program, which, while not yet tested, is deemed to be appropriate for the company’s business model and anticipated risk profile.
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