AM Best Revises Issuer Credit Rating Outlook to Negative for Queen City Assurance, Inc. and Vine Court Assurance Incorporated

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to negative from stable for the Long Term-Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Queen City Assurance, Inc. and Vine Court Assurance Incorporated, both domiciled in Burlington, VT, and collectively referred to as Queen City Assurance Group (the group). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The negative outlooks reflect AM Best's concerns regarding the deterioration in the group's underwriting performance in recent years, which, if sustained, could pressure operating performance such that it no longer supports the current assessment. The group’s underwriting results weakened in 2024, due to an uncharacteristically high level of property losses, and deteriorated further in 2025, driven by elevated casualty losses, including adverse reserve development, as well as pressure from the medical expense containment program. However, overall earnings remained positive, underpinned by solid investment income.

The group’s level of risk-adjusted capitalization is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the group consistently maintains strong liquidity measures while adhering to a conservative investment philosophy. The ratings also consider the financial flexibility afforded to the companies via their publicly traded parent, The Kroger Co. (Kroger) [NYSE: KR], one of the largest companies in the food retail industry. The neutral business profile assessment reflects a broadly diversified range of coverages that the group provides Kroger across its extensive operations. AM Best recognizes the group as an integral part in Kroger's overall ERM framework, with financial resources and support available to them as single-parent captives providing tailored insurance coverage for property/casualty risks. AM Best expects the parent's ability and willingness to support the captives will not change.

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.

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