Credit ratings of Core Specialty subsidiaries upgraded by AM Best

As specialty insurer Core Specialty Insurance Holdings, Inc.’s product and geographical diversification continues to improve on the back of acquisitions and organic growth initiatives, AM Best has upgraded the credit ratings of its subsidiaries.

The global credit rating agency has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” (Excellent) from “a-” (Excellent) of both StarStone Specialty Insurance Company and StarStone National Insurance Company.

At the same time, AM Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICRs to “a” (Excellent) from “a-” (Excellent) of Lancer Insurance Company and Lancer Insurance Company of New Jersey.

The ratings agency has also upgraded the FSR to A (Excellent) from B++ (Good) and the Long-Term ICR to “a” (Excellent) from “bbb+” (Good) of American Surety Company (Indianapolis).

For StarStone Specialty Insurance Company, StarStone National Insurance Company, and American Surety Company (Indianapolis), the outlooks of the ratings have been revised from positive to stable, and for Lancer Insurance Company and Lancer Insurance Company of New Jersey, the outlook of the ratings remain stable.

Together, these companies are subsidiaries of Cincinnati headquartered Core Specialty, and AM Best has confirmed that these ratings reflect the parent’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management (ERM).

Additionally, AM Best has removed from under review with developing implications and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Standard Life and Accident Insurance Company (SLAICO), an affiliate of Core Specialty. The outlook assigned to these ratings is also stable.

“The rating upgrades reflect continued improvement in Core Specialty’s product and geographical diversification through acquisitions and organic growth initiatives,” says AM Best. “Since its formation in 2020, Core Specialty has grown substantially and increased market share in various key segments, all while maintaining risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and producing profitable results. While some level of operational risk exists with rapid expansion, Core Specialty has somewhat mitigated this risk through limiting the number of legacy reserves acquired and acquiring seasoned books of business.”

In terms of SLAICO, AM Best notes that the ratings reflect its very strong balance sheet strength, adequate operating performance, limited business profile, and appropriate ERM.

“SLAICO is anticipated to maintain very low levels of total risk overall. This will support Core Specialty’s medical stop loss division although most of the business will be heavily reinsured. AM Best will continue to monitor SLAICO going forward, as it supports the greater Core Specialty strategy,” concludes AM Best.

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