AM Best Downgrades Credit Ratings of Vault E&S Insurance Company; Places Credit Ratings Under Review With Developing Implications

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating to A-(Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings to “a-” from “a” of Vault E&S Insurance Company (Vault E&S) (Little Rock, AR). In addition, AM Best has placed these Credit Ratings (ratings) under review with developing implications.

The ratings reflect Vault E&S’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings have been downgraded and placed under review as Vault E&S is no longer considered a strategic investment to its current ultimate parent, Allied World Assurance Company Holdings, Ltd. (Allied World). This rating action follows the recent announcement that Cornell Capital and Hudson Structured Capital Management Ltd. have jointly entered into a definitive agreement to acquire majority ownership of Vault E&S and its related entities from Allied World. Management has communicated detailed plans regarding the expected reinsurance structure and capitalization of Vault to be implemented when the transaction closes, which is anticipated to occur in the first quarter of 2021, pending regulatory approvals. The plans are expected to improve Vault’s quality of capital, financial leverage and capital flexibility, absent Allied World's majority ownership. The ratings will remain under review until the transaction has closed and AM Best has evaluated the post-transaction details.

Vault was created in 2017 and remains committed to providing coverage to the high net worth homeowners market. Since initially writing business in Florida, the company has expanded into several states including South Carolina, New Jersey, Connecticut and Pennsylvania. The company remains relatively new and continues to expand prudently in accordance with its strategic plan.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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