Global rating agency AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of the operating entities of Trisura Group Ltd.
The operating entities of Trisura includes Trisura Specialty Insurance Company (TSIC), Trisura Insurance Company (TIC), Bricktown Specialty Insurance Company (BSIC) and Trisura Guarantee Insurance Company (TGIC).
TSIC, TIC, and BSIC are based in Oklahoma City, OK, while TGIC is based in Toronto, Ontario, Canada.
According to Best, in order to change its outlook from negative to stable, the Canadian group must improve operational risk management processes for the management of captives in its US operations.
However, while Trisura is currently addressing these issues from a policy, organisational and corporate governance perspective, Best said that the effectiveness of these actions will require time to evaluate.
According to Best, the revision of the outlooks follows a CAD 81.5 million one-time write-down of reinsurance recoverables in Q422, which majorly offset consolidated net income, even though the firm maintained a profitable year.
The write-down originated from a reinsurance recoverable related to a fronting program for a captive reinsurance program on US P&C risks.
Further, Best noted that the Credit Ratings reflect Trisura’s overall balance sheet strength – which Best assesses as very strong – as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
