Obsidian Insurance Holdings has announced that AM Best has assigned an A- (Excellent) financial strength rating to its recently-formed Obsidian Specialty Insurance Company, an excess and surplus (E&S) lines insurer.
Obsidian Specialty Insurance Company was established in Delaware as a domestic surplus lines insurer with the carrier receiving its certificate of authority in September this year.
The insurer was capitalised with a $30 million cash contribution from Obsidian Insurance Holdings as well as the contribution of 100% of the capital stock of Obsidian Insurance Company, an AM Best rated A- rated admitted insurance company.
Obsidian Specialty’s addition strengthens the strategic position of Obsidian as a leading program fronting carrier serving Managing General Agents, Managing General Underwriters, and Program Managers. The company plans to operate on a country wide basis.
The rating of Obsidian Specialty brings together Obsidian Insurance Company’s rating with Obsidian Specialty on a pooled basis.
Both the Ohio and Delaware Departments of Insurance have approved the consolidated group entering into three inter-company agreements for administrative services, tax sharing, and pooled reinsurance.
AM Best’s ratings reflect the consolidated group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The hardening rates in the E&S market as well as an increase in overall MGA activity in the E&S market drove the strategic decision to form Obsidian Specialty.
William Jewett, Chief Executive Officer of Obsidian, said: “Obsidian Specialty continues to build a truly differentiated hybrid program carrier, and the addition of surplus lines capabilities represents a significant step in our development. It is important that Obsidian offer a full suite of capabilities and supporting services as we partner with best-in-class MGAs and program managers.”