Global non-life specialty insurer R&Q Insurance Holdings Ltd. has announced that AM Best has recognized Accredited as an independent ratings unit, distinct from R&Q.
AM Best has maintained the Financial Strength Rating of A- (Excellent) of Accredited Specialty Insurance Company (ASI), Accredited Surety and Casualty Company, Inc. (ASC) and Accredited Insurance (Europe) Limited (AIEL).
While providing the ratings, AM Best cited Accredited’s balance sheet strength, which the ratings agency assessed ‘as very strong.’
AM Best also noted its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings reflect a neutral impact from the sub-groups ownership by R&Q.
This rating is an important part of establishing Accredited as a stand-alone entity, demonstrating its financial strength to MGA and reinsurance partners.
As recently announced, Accredited has already achieved the necessary approvals to operate as a separate holding company within the Group and a process is underway for the potential sale of Accredited with interest expressed by a number of parties.
William Spiegel, Chief Executive Officer, commented, “Since announcing our strategic plan to separate Accredited and R&Q Legacy we have moved at pace to realize this objective. Securing an independent rating for Accredited is a critical milestone, underpinning its exciting prospects as a standalone business. As we recently announced, Accredited has enjoyed an excellent start to 2023 with a Gross Written Premium for the 12 months ended 31 March 2023 of ~$2 billion. This independent AM Best rating will give the team, and their partners in the market, continued confidence as we build on Accredited’s position as a leading global independent hybrid carrier.”
R&Q Insurance Holdings announced in April plans to separate its Program Management business and its Legacy Insurance business.
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.
