28 July 2017Analysis

KBRA proposes new ratings methodology for captives

New York-based Kroll Bond Rating Agency is releasing a new methodology for rating captive insurance companies.

The methodology will be available for comment through until August 18, and describes KBRA’s process for assessing the financial strength of captive insurers.

It will incorporate both quantitative and qualitative analysis of the captive insurer as well as an evaluation of the strategic importance of the captive to its owners, and whether the owner enhances or diminishes the financial strength of the captive insurer.

KBRA also considers the quality of capital, reserving practices, leverage, reinsurance, operating fundamentals, regulatory environment, risk management and sovereign risk in its captive ratings approach.

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