AM Best has upgraded the Issuer Credit Rating of PURE Specialty Exchange, citing the firm’s financial flexibility, high-quality assets, and conservative investment portfolio.
Spelt out, AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) of PURE Specialty Exchange.
At the same time, the rating agency has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Privilege Underwriters Reciprocal Exchange.
The above insurance entities comprise PURE Insurance Group, and the outlook of these Credit Ratings is stable.
According to AM Best, the ratings reflect the group’s balance sheet strength, which the rating agency assesses as strong, as well as PURE’s marginal operating performance, neutral business profile and appropriate enterprise risk management.
AM Best observed that the strong balance sheet assessment reflects PURE’s “very strong” risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio.
Additional positive assessment factors include, as mentioned, financial flexibility, high-quality assets, and a conservative investment portfolio.
The rating agency noted that partially offsetting these positive factors is the group’s exposure to catastrophe losses, its reliance on reinsurance, and a capital structure that is comprised mostly of surplus notes.
Finally, the ratings consider implicit and explicit support provided by Tokio Marine Holdings, Inc. (TMHD), and its lead insurance operating company, Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF).
“TMNF’s support of PURE Insurance Group aligns with TMHD’s strategy of expanding its international business through acquisition in developed and emerging markets, in addition to providing diversification of revenues and customer segments,” AM Best concluded.
