AM Best has upgraded the Long-Term Issuer Credit Ratings to “a+” (Excellent) and affirmed the Financial Strength Rating of A (Excellent) of MS Transverse Specialty Insurance Company, MS Transverse Insurance Company and TRM Specialty Insurance Company, collectively referred to as MS Transverse Insurance Group (MS Transverse).
According to AM Best, the ratings reflect MS Transverse’s balance sheet strength, which it assesses as very strong, as well as the group’s adequate operating performance, limited business profile and appropriate enterprise risk management. The outlook of these ratings is stable.
AM Best additionally noted that MS Transverse’s ratings benefit from rating enhancement, in the form of lift, due to the support provided by its ultimate parent, MS&AD, and its lead insurance entity, Mitsui Sumitomo Insurance (MSI).
The rating agency continued, “The Long-Term ICR upgrade reflects the significance of the unconditional financial guarantee agreement put in place in 2023 by MSI, as well as the increased operational integration with the North American subsidiaries of MSI.
“This agreement confirms MSI’s commitment to support MS Transverse’s growth opportunities in the U.S. managing general agent fronting market.”
MS Transverse’s ratings are also reportedly supported by the group’s risk-adjusted capitalisation at the “very strong level”, as per AM Best’s Capital Adequacy Ratio (BCAR).
AM Best stated that the overall strength of MS Transverse’s balance sheet remains very strong despite a decline in the BCAR in 2023 due to the significant growth of premiums, reserves and reinsurance recoverables.
The rating agency thus anticipates the BCAR to remain at least in the very strong range in the near term.
AM Best concluded, “Solid underwriting results and net investment income continue to drive the company’s operating performance. MS Transverse is among the top 10 fronting carriers in the U.S. MGA market based on direct premiums written and is expected to advance its position further in the near term.”
