AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit Rating of “a-” (Excellent) of Apogee’s Vermont-domiciled captive, Prism Assurance.
Prism is a single parent captive insurance company of Apogee, one of the largest architectural design and construction companies in the United States. The outlook for the ratings is stable.
The business profile is limited as the captive provides very specific lines of coverage to Apogee, although the captive’s risks do have a level of geographical diversification due to the scope of its parent’s operations.
The ratings reflect Prism’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Prism’s balance sheet is supported by risk-adjusted capitalisation at the strongest level, as measured by AM Best’s capital adequacy ratio (BCAR), strong liquidity and its afforded financial flexibility and support from its parent company.
AM Best said the company’s operating performance reflects consistent annual net profits and a low-cost expense structure that has led to an underwriting expense ratio that is a fraction of its peers’ average in comparison.
The company’s operating income is largely the result of a steady flow of royalty and investment income, which adequately offsets any volatility in underwriting and generally allows for healthy profits each year.
The captive is interwoven into Apogee’s ERM program, and as a result, Prism displays excellent risk identification and mitigation processes.
AM Best said Prism is an integral component of Apogee’s overall organisation’s risk management capability and awareness.
“Prism works cohesively with business units across the overall organisation to reduce claims severity and frequency,” the ratings agency said.