AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) for Spinnaker Insurance Company and its 100% reinsured subsidiaries, Spinnaker Specialty Insurance Company, and Mainsail Insurance Company.
Collectively known as Spinnaker Insurance Group, all companies are headquartered in Bedminster, NJ. The outlook for these Credit Ratings is stable.
The affirmation reflects AM Best’s assessment of Spinnaker’s very strong balance sheet strength, coupled with its adequate operating performance, limited business profile, and effective enterprise risk management.
Key factors contributing to the positive ratings include Spinnaker’s robust risk-adjusted capitalisation, as measured by Best’s Credit Adequacy Ratio (BCAR), a favourable trend in operating performance in recent years, and an experienced management team.
Additionally, the ratings acknowledge the financial and operational support Spinnaker has received from its ultimate parent company, Hippo Holdings Inc., since its acquisition of Spinnaker in 2020.
Hippo Holdings Inc. has demonstrated its commitment through capital contributions, despite posting significant recurring operating losses.
Although Hippo is currently projecting positive earnings before interest, income taxes, depreciation, and amortisation (EBITDA) by the end of 2024, AM Best cautions that Spinnaker’s ratings could be adversely affected if Hippo’s financial trends do not improve as anticipated.
The stable outlooks assigned by AM Best reflect the expectation that Spinnaker will maintain profitable operating performance in the near term.
Furthermore, the rating agency anticipates that Spinnaker’s balance sheet strength will continue to support its current ratings level and planned premium growth.
