AM Best Assigns Credit Ratings to Guilderland Reinsurance Company; Affirms Credit Ratings of Knight Insurance Company Ltd. and Its Affiliates

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to Guilderland Reinsurance Company (GRC) (New York, NY). The outlook assigned to these Credit Ratings (ratings) is stable. Additionally, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of Knight Insurance Company Ltd. (Knight Insurance) (Cayman Islands), KnightBrook Insurance Company (Wilmington, DE) and Knight Specialty Insurance Company (Wilmington, DE). The outlook of these ratings is stable. These companies collectively are referred to as Knight.

The ratings of GRC reflect its role as a member of Knight and the explicit support provided to GRC through the implementation of a quota share reinsurance agreement with Knight Insurance, the lead company of Knight. Knight’s initial intentions are for GRC to directly write a program named GAP emanating out of New York, which is an existing product currently written through another fronting insurer.

The ratings of Knight reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The balance sheet strength reflects Knight’s risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by solid organic surplus growth in the past five years, with enhanced financial flexibility as a member of the Hankey Group, a group of companies primarily in the automotive industry, with $23.4 billion in assets in 2023. The balance sheet also benefited from a loss portfolio transfer and adverse development cover executed in 2022 to remove some legacy non-performing programs off its books, protecting its balance sheet and future operating results from further prior year adverse development. Partially offsetting these strengths is its very high common stock leverage in pursuit of a group goal of long-term capital gains, that is mitigated by ample enterprise liquidity and financial flexibility, demonstrated by historical timely capital contributions when needed. Knight’s adequate operating performance benefits from significant operating and process enhancements implemented in its recent past, which included strengthening of underwriter guidelines and controls, better monitoring and management of its general agent partner relationships and oversight of third-party claims adjusters.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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