OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best has assigned a financial strength rating of A- (excellent) and a long-term issuer credit rating of âa-â (excellent) to Richmond National Insurance Company (Richmond National) (Concord, NH). The outlook assigned to these credit ratings (ratings) is stable.
The ratings reflect the strength of Richmond National’s balance sheet, which AM Best considers to be very strong, as well as its adequate operational performance, limited business profile and appropriate enterprise risk management (ERM).
Richmond National was formed in 2021 and will focus exclusively on the U.S. surplus and surplus line market, writing coverage for a diverse mix of hard-to-place risks for small businesses.
The very good strength of Richmond National’s balance sheet is supported by its risk-adjusted capitalization at the highest level, as measured by Best’s capital adequacy ratio (BCAR), for all confidence intervals in current periods. , projected future scores and in stress scenarios. Richmond National’s balance sheet valuation reflects the recent capital increase in support of expected premium growth, the conservative nature in which the investment portfolio will be established and the protection afforded by its comprehensive reinsurance program diversified among highly rated participants. Given the cautious nature with which management plans to develop the business, capital is in place from day one to support the five-year written premiums business plan.
AM Best believes that Richmond National’s operating performance is adequate based on a clearly defined and achievable business plan, which includes management’s goal of achieving pre-tax operating profitability over the course of the initial period of five years.
The assessment of Richmond National’s business profile is limited given the start-up nature of the organization.
Richmond National developed the framework to establish a strong ERM culture throughout the organization, which AM Best considers appropriate given the scale, scope and complexity of the organization.
Positive rating actions are unlikely in the short term. Key factors that could lead to negative action for Richmond National’s ratings and outlook include failure to meet medium-term projections as shared with AM Best, particularly if the resulting performance is below that of highly rated peers. similar.
Negative rating actions could also occur if Richmond National’s risk-adjusted capitalization declines to a level that does not support its very good assessment of its balance sheet strength.
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