AM Best Affirms Credit Ratings of Ategrity Specialty Holdings LLC and Its Subsidiaries

AM Best Affirms Credit Ratings of Ategrity Specialty Holdings LLC and Its Subsidiaries

OLDWICK - NOVEMBER 22, 2024 10:37 AM (EST) - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" (Excellent) of Ategrity Specialty Insurance Company (ASIC) and its affiliate, Ategrity Specialty Insurance Limited (ASIL). Concurrently, AM Best has affirmed the Long-Term ICR of "bbb-" (Good) of their holding company, Ategrity Specialty Holdings LLC (Ategrity). The outlook of these Credit Ratings (ratings) is stable. Ategrity and ASIC are domiciled in Wilmington, DE, USA, while ASIL is domiciled in Hamilton, Bermuda.

The ratings reflect Ategrity'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).

Ategrity maintains a very strong level of balance sheet strength considering the execution risk inherent in the group's operations. The company's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is at the strongest level. Ategrity has grown more than originally projected over the past few years; however, capital levels have kept pace with the increased premium and loss volume due to regular capital contributions from Ategrity's majority owner. AM Best expects Ategrity to manage its capital closer to its strategic targets, and for the balance sheet strength to be maintained at the very strong level based on the improving operating results and the company's capital management strategy.

Ategrity's management was able to execute on its strategy to reduce volatility in its business and improve underwriting profitability by limiting exposure to property catastrophe lines of business, which had pressured operating earnings before 2022. Pivoting away from more volatile business and focusing on middle market commercial clients has resulted in improved underwriting results for 2023, as well as favorable net income during the past two years. The improved profitability metrics continued through the first nine months of 2024, driven by the shift in business mix coupled with rate increases. Prospective improvement of the group's operating profitability is dependent on management's ability to continue to execute on its business plan with a greater focus on lines of business that have less inherent volatility and more profitability. The group's investment performance has been accretive to results as the alternative investment portfolio employed by Ategrity continues to outperform comparable benchmarks.

Ategrity, through its U.S. operating subsidiary, ASIC, began writing excess and surplus lines of business late in 2018. The group's business profile is considered limited given its size and shifting business mix, although management has strong existing industry relationships. However, the business profile is enhanced by innovative solutions that support underwriting discipline along with management direction. The company is enhancing its ERM program, which is expected to lead to greater stability in its underwriting results.

Media Contact

Antonietta Iachetta
Senior Financial Analyst
+1 908 882 1901
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Steven M. Chirico, CPA
Director
+1 908 882 1694
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Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
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Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
[email protected]

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. For more information, visit https://www.ambest.com.