AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Alestri Insurance Company (Alestri) (Seattle, WA). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Alestri’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Alestri is a joint venture between COPIC Insurance Company, Michigan Professional Insurance Exchange and Physicians Insurance A Mutual Company. The company plans to begin writing excess hospital professional liability (HPL) insurance through independent agents and brokers during 2020. Alestri will focus on providing coverage for the lead layer in excess of each policyholders’ self-insured retention. The vast majority of risk is ceded to its owners and Hannover Rück SE through quota share and excess of loss agreements. Thus, the company will operate with an elevated degree of reinsurance dependence. The associated credit risk is reduced significantly by the high credit quality of counterparties – all rated with an FSR of A- or higher.
AM Best anticipates Alestri’s underwriting results to be adequate over the long term, with ceding commissions offsetting incurred losses and expenses. Further, the conservative investment portfolio is expected to generate stable and consistent income, which will enhance overall operating profitability. The limited business profile assessment reflects the start-up nature of the company and product concentration in HPL. Alestri will benefit from the ERM programs of its owners, all of which have appropriate ERM frameworks in place and risk management capabilities that generally are in-line with their risk profiles.
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