AM Best Assigns Credit Ratings to S-Squared Insurance Company, Inc.
August 02 2024 - 5:15PM
Business Wire
AM Best has assigned a Financial Strength Rating of A
(Excellent) and a Long-Term Issuer Credit Rating of “a” (Excellent)
to S-Squared Insurance Company, Inc. (S2) (Honolulu, HI). The
outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect S2’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).
The stable outlooks consider AM Best's expectation that S2’s
balance sheet strength assessment fundamentals will continue to
strengthen over the medium term, with internal profit generation
and retention levels that support continued growth in the company’s
surplus, while maintaining profitable operating performance.
S2’s balance sheet strength assessment is underpinned by its
risk-adjusted capitalization, which is at the strongest level, as
measured by Best’s Capital Adequacy Ratio (BCAR). This captive
insurer is a strategic and integrated extension of Micron
Technology, Inc.’s [Nasdaq: MU] (Micron) corporate ERM strategy,
and Micron provides S2 capital and financial flexibility. S2’s
risk-adjusted capitalization is expected to remain at the strongest
level, supported by increased retention of earnings. S2 has a
conservative investment portfolio with conservative loss reserving
strategies.
S2’s operating performance reflects actuarially needed premium
for its coverage offerings of U.S. workers’ compensation and
participation in the property tower covering production facilities
in Japan and Taiwan. Though S2 is a new formation, Micron has
experience with both of these lines since its founding in the
1970s. Micron has had minimal workers’ compensation losses
historically and brought this business into the captive for
efficiency. Micron believes that S2’s participation in the property
tower can provide a portion of the coverage as efficiently as the
traditional property market.
S2's limited business profile reflects its position as a
single-parent captive of Micron with product and geographic
concentration. Property exposures are concentrated in the
Asia-Pacific region with workers’ compensation coverage provided
for Micron’s U.S. facilities.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit
www.ambest.com/captive.
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 use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
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 © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Sebastian Caballero Pachas Financial Analyst +1 908
882 1680 sebastian.caballero@ambest.com
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