AM Best has affirmed the credit Ratings of Vantage Risk Ltd. and Affiliates (Vantage Group) and has assigned them a positive outlook.
The Group’s Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” (Excellent) reflect its 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.
The ratings affirmation follows an active initial two years of operations for the Group. Underwriting income was adversely impacted by elevated catastrophe losses in the Group’s reinsurance operations for the second year in a row; however, AM Best expects projected combined ratios for 2022 to improve over 2021.
In response to the heightened volatility, AM Best noted, the Group has implemented a strategy to move property catastrophe business off its balance sheet, but continue offering it through their insurance-linked securities (ILS) vehicles.
This strategy is expected to provide Vantage with accretive income while reducing volatility in operating results, the rating agency stated.
After a slow start in 2021 due to various challenges, the Group continues to expand its primary insurance operations.
As it continues to execute its business plans, the reinsurance portfolio will become relatively smaller than the primary portfolio, said AM Best. This will have less of an impact to the Group’s bottom line, the agency added.
As the Group enters its third year of operation, AM Best plans to continue to monitor Vantage’s progression, and it forecasts that the Group’s operating performance will begin to stabilise as its business plan is executed.
