AM Best affirms Accredited ratings
AM Best has maintained the under review with negative implications status for the financial strength rating of A- and the long-term issuer credit ratings of “a-” of Accredited Specialty Insurance Company (ASI), Accredited Surety and Casualty Company and Accredited Insurance.
Collectively known as Accredited, all are wholly owned subsidiaries of R&Q Insurance Holdings.
AM Best said that the credit ratings reflect Accredited’s balance sheet strength, which it assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings reflect a neutral impact from the sub-group’s ownership by R&Q.
The rating actions follow the announcement by R&Q on 12 June 2023, that it has completed the internal reorganisation to separate program management and legacy insurance businesses following receiving all necessary internal and external approvals. Furthermore, R&Q announced that it continues to explore strategic transactions with third parties as part of the separation to enable Accredited to operate independently. A process is underway for the potential sale of Accredited with interest expressed from a number of parties.
The Accredited subsidiaries previously received full rating enhancement from R&Q. Since AM Best no longer views these subsidiaries to be integral to R&Q, Accredited now forms an independent rating unit, distinct from R&Q.
These rating actions pertain only to Accredited. An assessment of the R&Q group will be conducted in the near term, after it publishes its 2022 year-end results; this could lead potentially to further rating actions. Despite pressure on R&Q’s risk-adjusted capitalisation, AM Best expects Accredited’s balance sheet to be somewhat insulated over the near term, given that contracts are expected to be put in place that restrict capital extraction.
The ratings are expected to remain under review until AM Best has sufficient clarity over the rating fundamentals of Accredited and R&Q, subsequent to the sale of Accredited.