AM Best Affirms Credit Ratings of Global Indemnity Group, LLC and Its Subsidiaries
April 21 2021 - 4:18PM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of A (Excellent) and the Long Term Issue Credit Rating (Long-Term
ICR) of “a” of the U.S. operating subsidiaries of Global Indemnity
Group, LLC (Global Indemnity) (Delaware) [NASDAQ: GBLI].
Concurrently, AM Best has affirmed the Long-Term ICR of “bbb” of
Global Indemnity. (See
below for complete list of companies and ratings). AM Best also has
affirmed the Long-Term Issue Rating (Long-Term IR) of “bbb-” on the
$130 million 7.875% subordinated notes due 2047 of Global Indemnity
Limited, now guaranteed by Global Indemnity. The outlook of these
Credit Ratings (ratings) is stable.
The ratings reflect Global Indemnity’s balance sheet strength,
which AM Best assesses as strongest, as well as its adequate
operating performance, neutral business profile and appropriate
enterprise risk management.
The balance sheet strength assessment is based on Global
Indemnity’s Best’s Capital Adequacy Ratio (BCAR) score being at the
strongest level, supported by a conservative investment portfolio,
conservative reserving practices and added financial flexibility
through its access to the capital markets. Through its six member
intercompany pool, the group targets a diverse mix of specialty
niche business that is generally not offered in the standard
insurance marketplace. Each company serves a specific market or
distribution channel, which provides the group access to a
substantial amount of commercial and personal lines business in the
United States.
The group’s operating earnings have generally performed in line
with its peers over the past five years; catastrophe losses
dampened earnings in 2017 and 2018, but bounced back to historic
levels in 2019 and 2020. The group recently made significant
progress in reducing its catastrophe exposures drastically. AM Best
believes that the group’s continuing efforts to improve
underwriting and reduce catastrophe exposure should provide
additional benefits to its earnings going forward.
Global Indemnity’s business profile is assessed at neutral. The
group is composed of several long-standing and well-recognized
franchises that provide it with a diverse mix of business through
multiple distribution channels. Earlier today, Global Indemnity
announced the appointment of Mr. David S. Charlton as their new
CEO. Mr. Charlton is a 34-year veteran property & casualty
insurance industry senior executive, with particular expertise in
excess and surplus, binding authority, small business and other
specialty insurance – a background well aligned with that of Global
Indemnity.
Positive rating actions could occur if the company can
demonstrate sustainable fundamental operating results at levels
that exceed those of its peers while maintaining balance sheet
strength at the strongest level. Downward pressure on the ratings
or outlooks could result if there is material deterioration in the
organization’s risk-adjusted capitalization or a significant
decline in underwriting and operating performance.
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been
affirmed with stable outlooks for the subsidiaries of Global
Indemnity Group, LLC:
- American Reliable Insurance Company
- Diamond State Insurance Company
- Penn-America Insurance Company
- Penn-Patriot Insurance Company
- Penn-Star Insurance Company
- United National Insurance Company
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20210421006021/en/
Jieqiu Fan Senior Financial Analyst +1 908 439
2200, ext. 5372 jieqiu.fan@ambest.com
Daniel J. Ryan Senior Director +1 908 439 2200,
ext. 5325 daniel.ryan@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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