Global credit rating agency AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to IQUW Re Bermuda Limited, which enables IQUW to access $1 billion in group capital as the specialty re/insurer looks to expand its third-party reinsurance business.
The rating follows IQUW Holdings Bermuda Limited’s successful senior debt issue of $170 million, enabling the group to increasingly leverage its Bermuda platform by writing more products across all classes.
Additionally, AM Best has assigned a Long-Term Issue Credit Rating of “bbb-” (Good) on the transaction which is due 2035, issued by IQUW.
The outlook assigned to these ratings is stable. The ratings reflect IQUW’s ‘strong” balance sheet strength, adequate operating performance, neutral business profile, and appropriate enterprise risk management.
IQUW Group reported a diversified book of $1.3 billion in gross written premiums in 2023.
In 2024, GWP was reported at $1.6 billion, with a combined ratio of 83.1% from the Bermuda platform and Lloyd’s Syndicates 1856 and 218. The Bermuda build-out aligns with IQUW’s strategy to add distribution and platforms to build franchise value through a service-led value proposition.
The balance sheet strength assessment includes modest leverage and good expected interest coverage. AM Best explained, “IQUW’s balance sheet strength is supported by an appropriate reinsurance programme placed with reinsurers of excellent credit quality, a conservative investment strategy, good liquidity and limited exposure to legacy business.”
IQUW’s adequate operating performance assessment considers the group’s well-defined five-year business plan and good underwriting performance in financial years 2023 and 2024. Despite heightened execution risk during the group’s growth phase, AM Best considers its risk management capabilities “relatively sophisticated and key in controlling and mitigating risks presented during the early years of operations.”
The ratings of IQUW Re, the firm’s Bermuda-domiciled reinsurer also reflect its strategic importance to IQUW, as it writes a substantial whole account quota share of the group’s Lloyd’s corporate member and is expected to underwrite a modest volume of third-party reinsurance business over time.
Stephen Young, Chief Executive Officer (CEO), IQUW Bermuda, said, “I am incredibly proud of the IQUW team and all the work that has led us to this milestone. Over the last three years, we have built an experienced team and embedded new operational capabilities in Bermuda from the ground up. This rating and Bermuda balance sheet will strengthen IQUW’s relevance in the market and support the next stage of IQUW’s growth strategy. The rating enhances our ability to write third-party business from Bermuda, which will provide IQUW with the flexibility to react to market conditions and expand in line with our risk appetite.”
Peter Bilsby, Group CEO, IQUW, added, “Securing an A- AM Best rating is a significant endorsement of IQUW’s financial strength and our capability to support clients on a global scale. As a Bermuda-based company, this rating allows us to expand alongside Lloyd’s. Our Bermudian platform is complementary to our Lloyd’s presence and will enable us to continue to responsibly grow the business through both locations.
“IQUW’s strong foundation has been delivered through excellent market collaboration and our vision of intelligent underwriting. That vision combines data and technology with human expertise to deliver insightful and fast responses to our clients and brokers – an approach that has seen us named by Gracechurch as delivering Outstanding Underwriting service – and one that provides us with a blueprint to continue to develop in Bermuda.”
The senior debt issue was supported by funds and accounts managed or advised by Hudson Structured Capital Management Ltd. (conducting its re/insurance business as HSCM Bermuda) and investors associated with Kilter Finance. Howden Capital Markets & Advisory acted as financial advisors to IQUW.
