Global credit rating agency AM Best has assigned a Preliminary Credit Assessment (PCA) to Amherst Specialty Insurance Company (Amherst) (Addison, TX) with a Financial Strength Assessment of A- pca (Excellent) and a Long-Term Issuer Credit Assessment of “a-” pca (Excellent).
According to Best, the outlook assigned to this PCA is stable.
The rating agency explained that the PCA reflects Amherst’s balance sheet strength, which Best assesses as very strong.
Best also cited Amherst’ adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Moreover, the proposed balance sheet strength assessment is driven by Best’s expectation that Amherst will maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, over the five-year start up period.
Another key factor to note, is that the balance sheet strength assessment further reflects Amherst’s conservative investment portfolio and overall liquidity profile, according to Best.
However, partially offsetting these factors is the company’s limited financial flexibility on a stand-alone basis.
In addition, Best also noted that it assesses the company’s business profile as limited given the startup nature of the organisation and strong competition in the surplus lines industry.
Best also explained that it views Amherst’s ERM capabilities as appropriate, which is supported by an ERM framework with clear identification of risks, tolerances and reporting requirements.
Amherst was founded in December 2023 as a Texas domiciled surplus insurance carrier. The company is a subsidiary of the ultimate parent, RTC Financial Group.
