AM Best assigns A- ratings to Spinnaker’s 100% reinsured subsidiary Wingsail

Global credit ratings agency AM Best has assigned Wingsail Insurance Company, a fully reinsured subsidiary of Spinnaker Insurance Company, a Financial Strength Rating of A- and a Long-Term Issuer Credit Rating of “a-”, with a stable outlook.

AM Best has also affirmed the same ratings and stable outlook for Spinnaker Insurance Company and its 100% reinsured subsidiary, Spinnaker Specialty Insurance Company.

All companies are based in Bedminster, NJ, and collectively referred to as Spinnaker Insurance Group (Spinnaker).

The stable outlook reflects AM Best’s expectation that Spinnaker will continue to deliver profitable operating performance while maintaining balance sheet strength that supports its current ratings and planned growth.

AM Best assesses Spinnaker’s balance sheet strength as very strong, supported primarily by capital contributions from its publicly traded parent company, Hippo Holdings, which acquired Spinnaker in 2020.

Additional surplus growth has been driven by improved retained earnings in recent years. The company’s financial stability is further bolstered by its conservative participation in select program business, supported by a robust reinsurance program with high-quality reinsurers, and a conservative investment portfolio focused on long-term bonds and short-term holdings.

The ratings also reflect the operational and financial flexibility provided by Hippo. However, if Hippo’s financial performance fails to meet expectations, it could negatively affect Spinnaker’s ratings.

Spinnaker’s operating performance is assessed as adequate, despite fluctuations in earnings over the past five years. Over the long term, Spinnaker has consistently reported strong pre-tax operating income, outperforming the personal property industry average.

This performance has been driven by generally profitable underwriting results, complemented by investment income. As of September 30, 2024, Spinnaker reported $17.45 million in pre-tax operating income, primarily attributed to growth in non-Hippo programs and stabilised margins in Hippo-related business. Despite challenges such as catastrophe losses, reinsurance costs, and ongoing investments in operations, Spinnaker has demonstrated consistent growth in pre-tax income over the years.

Spinnaker’s limited business profile assessment reflects a conservative strategy, ceding 80% to 100% of premiums to quota share reinsurers on a program-by-program basis. Its business is sourced through Program Administrators and Managing General Agents, with strong reinsurance protection largely structured as fronting arrangements. Spinnaker focuses on short-tail, property catastrophe-exposed programs, including personal lines and main street commercial insurance. Additionally, it writes short-tail specialty lines and other high-margin, adjacent programs.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.