OLDWICK, NJ–(BUSINESS WIRE)–AM Best affirmed the financial strength rating of A- (Excellent) and the issuer’s long-term credit rating of “a-” (Excellent) from Everspan Indemnity Insurance Company and Everspan Insurance Company. These companies are collectively referred to as Everspan Group. The outlook for these Credit Ratings (ratings) is stable. Both companies are domiciled in Scottsdale, AZ.
The ratings reflect the strength of the Everspan Group’s balance sheet, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and adequate enterprise risk management (ERM).
The balance sheet strength assessment recognizes the risk-adjusted capital that supports the group’s expected exposures throughout its initial five-year start-up period. Capital was provided by Ambac Financial Group, Inc. [NYSE: AMBC]. AM Best assesses the operational performance of Everspan Group as adequate based on the execution and implementation of its business plan during its formation stages. The group began actively writing new premiums during the second quarter of 2021. AM Best considers the business profile of the group to be limited. This encompasses the group’s position in the competitive space of participating fronting carriers. The group will provide services to a diverse mix of managing general agents aligned with highly selected reinsurance partners. The company maintains a strategic level of net premium for certain programs. The group’s ERM reflects a clearly defined risk appetite structure. It responds to the heightened risks inherent in its business profile and was designed by its highly experienced management team.
Negative rating actions could occur if risk-adjusted capital is below requirements, if actual operating results are unfavorable outside of initial projections, if the business is unable to gain traction in parameters of its business profile, or if the risk appetite and tolerance levels prove to be inadequate for the profile of the group.
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