AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Accredited Specialty Insurance Company, Accredited Surety and Casualty Company, Inc. and Accredited Insurance (Europe) Limited
LONDON, June 23, 2023--(BUSINESS WIRE)--AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" (Excellent) of Accredited Specialty Insurance Company (ASI) (Phoenix, AZ), Accredited Surety and Casualty Company, Inc. (ASC) (Orlando, FL) and Accredited Insurance (Europe) Limited (AIEL) (Malta). ASI, ASC and AIEL, collectively known as Accredited, are wholly owned subsidiaries of R&Q Insurance Holdings Ltd (R&Q) (Bermuda) [AIM: RQIH].
The Credit Ratings (ratings) reflect Accredited’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings reflect a neutral impact from the sub-group’s ownership by R&Q.
The rating actions follow the announcement by R&Q on 12 June 2023, that it has completed the internal reorganisation to separate program management and legacy insurance businesses following receiving all necessary internal and external approvals. Furthermore, R&Q announced that it continues to explore strategic transactions with third parties as part of the separation to enable Accredited to operate independently. A process is underway for the potential sale of Accredited with interest expressed from a number of parties.
The Accredited subsidiaries previously received full rating enhancement from R&Q. Since AM Best no longer views these subsidiaries to be integral to R&Q, Accredited now forms an independent rating unit, distinct from R&Q.
These rating actions pertain only to Accredited. An assessment of the R&Q group will be conducted in the near term, after it publishes its 2022 year-end results; this could lead potentially to further rating actions. Despite pressure on R&Q’s risk-adjusted capitalisation, AM Best expects Accredited’s balance sheet to be somewhat insulated over the near term, given that contracts are expected to be put in place that restrict capital extraction.
The ratings are expected to remain under review until AM Best has sufficient clarity over the rating fundamentals of Accredited and R&Q, subsequent to the sale of Accredited.
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.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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