AM Best has assigned a financial strength rating of A- (excellent) and a long-term issuer credit rating of “a-” (excellent) to Vermont-domiciled Relsure Vermont. The outlook for the ratings is stable.
Relsure was formed in 2014 and is wholly owned by New York-based limited partnership The Related Companies, which is engaged in real estate activity largely throughout the United States.
The captive provides general liability and workers’ compensation coverage through Related’s owner-controlled insurance programmes and property coverage.
Relsure also provides terrorism coverage for Related, but this is 100% reinsured with the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), and a panel of reinsurance partners.
The captive is considered a core element of Related’s risk management programme and plays a strategic role in delivering coverage and access to reinsurance for risks of its parent and affiliates.
The ratings reflect Relsure’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.
Relsure’s level of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio (BCAR), is assessed at the strongest level, where AM Best expects it to remain in future years.
The balance sheet strength assessment considers the company’s conservative investment strategy, solid liquidity measures and favourable loss reserve development over the last five years.
The stable outlook reflects AM Best’s expectation that Relsure’s balance sheet strength will remain at a very strong level, underpinned by its strongest level of risk-adjusted capitalisation, while operating performance continues to stabilise.
“Negative rating action could occur if risk-adjusted capitalization materially weakens or there is a significant shift in its reinsurance structure that no longer supports the current balance sheet strength assessment,” AM Best said.
“Negative rating action could also occur if underwriting performance weakens, which would reflect volatility in operating performance. Positive rating action could occur from sustainable improvement in underwriting performance, while organically growing surplus.”