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20 April 2022

AM Best rates Navient captive

Rating agency AM Best has given a financial strength rating of A- (Excellent) and a long-term issuer credit rating “a-” (Excellent) to Riverfront Insurance, the captive of US student loans business Navient.

According to Best, the ratings reflect Riverfront’s balance sheet strength, which AM Best assesses as strong, adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM). They also reflect explicit support from Navient Corporation.

Domiciled in Delaware in 2020 in response to the hard market, Riverfront writes error and omission and director and officer coverage for its parent. Its balance sheet strength is supported by the strongest risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), offset by a high annual aggregate retention level relative to surplus.

The parent bolsters the company’s balance sheet with a net worth maintenance agreement to be used when and if necessary.

“AM Best assesses Riverfront’s prospective operating performance as adequate based on company projections and a third-party feasibility study in establishing the captive,” the agency’s assessment adds.

It continues: “As the parent transitions its profile away from its role as a servicer for the Federal Direct Student Loan program and toward a consumer finance and business processing solutions company, it still remains susceptible to claims from its legacy private student loan portfolio. However, that risk is mitigated as Riverfront writes claims-made policies covering claims reported in the policy year of coverage (none to date). Riverfront’s ERM is integral to Navient from whence it originated to cover a portion of potential exposure subjected to market pricing and conditions.”

The captive does not use reinsurance.

AM Best also gives the captive stable outlooks, reflecting in part Navient’s continued support.


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23 November 2023   The insurance company is a captive of Italian company Eni.
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21 November 2023   The Bermuda-based captive has a strong balance sheet, the rating agency said.
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20 November 2023   The pair of captives are both domiciled in Bermuda.

More on this story

news
23 November 2023   The insurance company is a captive of Italian company Eni.
news
21 November 2023   The Bermuda-based captive has a strong balance sheet, the rating agency said.
news
20 November 2023   The pair of captives are both domiciled in Bermuda.