AM Best Withdraws Public Credit Ratings of Cadence Indemnity Inc.

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating to B- (Fair) from B++ (Good) and the Long-Term Issuer Credit Rating to “bb-” (Fair) from “bbb+” (Good) of Cadence Indemnity Inc. (Cadence) (Texas). Additionally, AM Best has placed these Credit Ratings (ratings) under review with negative implications. Concurrently, AM Best has withdrawn these public ratings of Cadence per the company’s request. Operating as a single-parent captive, Cadence provides coverage for a diversified portfolio of risks from several commonly owned operating companies.

The ratings reflect Cadence’s balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).

The rating downgrades reflect the weakening in Cadence’s balance sheet strength, driven by a significant decline in risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and increasing underwriting leverage metrics. In the latter half of 2025, Cadence experienced premium growth that substantially deviated from the business plans originally shared with AM Best at the time the company was initially rated in March 2025. Consequently, the captive’s underwriting risk materially increased, causing a significant decline in its BCAR score. These rating actions also reflect a revision in AM Best’s assessment of Cadence’s ERM to marginal from appropriate. The ratings will remain under review with negative implications pending additional meetings with management to evaluate Cadence’s ERM framework, including risk mitigation strategies and processes, receipt of a revised business plan, the filing of Cadence’s year-end 2025 statutory financial statements and the finalization of its year-end actuarial review.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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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