AM Best has assigned an A- (Excellent) Financial Strength Rating and an “a-” (Excellent) Long-Term Issuer Credit Rating to Ledgebrook Specialty Insurance Company and Stonehaven Specialty Insurance Company. Both Delaware-domiciled insurers form Ledgebrook Insurance Group (LIG), which is part of Ledgebrook Inc., a technology-enabled insurance business based in Boston, Massachusetts.
The ratings reflect LIG’s very strong balance sheet strength, adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The outlook for the ratings is stable.
According to AM Best, LIG’s balance sheet strength assessment is supported by expectations that the group will maintain the strongest level of risk-adjusted capitalisation, based on Best’s Capital Adequacy Ratio (BCAR), throughout its first five years of operation.
The assessment also assumes that LIG’s management will deliver its planned business strategy and maintain sufficient capital to support the group as it expands. The ratings therefore remain linked to the successful execution of the group’s plans during its start-up period.
AM Best’s assessment of LIG’s operating performance is adequate and is based on the group’s five-year business plan. As LIG is newly established, AM Best said its expected performance will depend on the effective implementation of the plan, with any deviations remaining within manageable levels over the period.
The group’s business profile is assessed as limited by AM Best. Within LIG, Ledgebrook Specialty is intended to provide capacity for first-party business, while Stonehaven Specialty will concentrate on third-party business.
AM Best said LIG’s proprietary technology platform provides support through improved data quality and more efficient pricing capabilities. However, the group’s relatively narrow product range and limited diversification by both business line and geography constrain the overall assessment of its business profile.
AM Best has assessed LIG’s ERM as appropriate, citing a formalised framework aimed at identifying, assessing and mitigating risks that could affect the organisation. While the group continues to develop its ERM framework, AM Best expects its risk management capabilities to expand alongside the business.
Overall, AM Best’s ratings indicate that it expects LIG to maintain a strong capital position while building its operating platform and expanding its insurance activities, subject to the successful execution of its business strategy.
