AM Best has assigned a financial strength rating (FSR) of ‘A’ (Excellent) and a long-term Issuer credit rating (Long-Term ICR) of “a” (Excellent) to Oxford Insurance Company MT LLC (Oxford MT), domiciled in Montana.
Oxford Risk Management Group is a United States captive management firm which specialises in captive and cell solutions for small and medium sized enterprises.
In 2018, the firm was bought by Risk Strategies, which has bought several captive management outfits in recent years.
Its first cell company, Oxford Insurance Company LLC, was formed in Delaware in 2010 as a special purpose captive company.
In 2022, Oxford added Oxford MT to its existing cell platforms to write exactly the same business, while diversifying its exposure across domiciles.
AM Best has also affirmed the FSR of ‘A’ (Excellent) and the Long-Term ICR of “a” (Excellent) of Oxford Insurance Company LLC (Wilmington, DE) and its affiliates: Oxford Insurance Company NC LLC (Wilmington, DE), Oxford Insurance Company TN LLC (Nashville, TN), and First Community Bankers Insurance Company, LLC (Nashville, TN).
AM Best said the ratings reflect Oxford’s balance sheet strength, assessed as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings agency said Oxford’s ERM practices are appropriate with strong operating controls and procedures in place to continually establish new cell structures and manage a platform with surveillance and monitoring to protect the integrity of the pool for policyholders.
The active cells also remain very strongly capitalised individually and collectively with strong operations.
Oxford has also begun offering a new litigation defence coverage to its clients, which the rating agency said it would monitor the governance of.
AM Best described Oxford’s solution as operating as a pooling arrangement that enables all active cells on its platforms to retain 20% of their own written premium with any claims submitted to the unified pool, while the remaining 80% of written premium is shared pro rata across a large base of insureds of similar size, avoiding concentrations and dependence on any single cell.
The ratings agency noted that loss ratios across the various cells are very low, effectively covering a hard-to-write and unique coverage for low frequency, high severity risks.