AM Best has assigned a financial strength rating of A (excellent) and a long-term Issuer credit rating of “a” (excellent) to Hawaii-domiciled S-Squared Insurance Company. The outlook for the ratings is stable.
S-Squared is a single parent captive owned by Micron Technology, an American producer of computer memory and computer data storage.
The captive, which was formed in 2021, has property exposures that are concentrated in the Asia-Pacific region in addition to workers’ compensation coverage provided for Micron’s US facilities.
Micron has had minimal workers’ compensation losses historically and brought this business into the captive for efficiency.
The firm also believes S-Squared’s participation in the property tower can provide a portion of the coverage as efficiently as the traditional property market.
The captive’s operating performance reflects actuarially needed premium for its coverage offerings of US workers’ compensation and participation in the property tower covering production facilities in Japan and Taiwan.
The ratings reflect S-Squared’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).
S-Squared’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is at the strongest level, as measured by Best’s capital adequacy ratio (BCAR).
The captive’s risk-adjusted capitalisation is expected to remain at the strongest level, supported by increased retention of earnings.