AM Best has assigned a Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” to Wakefield Insurance Company, LLC (Wakefield) (Nashville, TN). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Wakefield’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).
Wakefield was established to provide property and liability insurance coverage to senior and affordable multifamily housing facilities with common management and ownership interests.
The balance-sheet assessment is based on initial risk-adjusted capital that meets AM Best’s criteria for newly formed companies and is expected to support exposures through a five-year startup period. Capital and surplus is primarily in the form of a $25 million evergreen letter of credit. Operating performance is assessed as adequate based on historically favorable loss experience and a clearly defined business plan, which takes into consideration a level of execution and implementation risk. As a startup captive operation writing a modest amount of deductible reimbursement premium, AM Best considers the company’s business profile to be limited. The ERM assessment of appropriate reflects a well-defined risk appetite with strict underwriting guidelines in place. Key risks have been thoroughly identified and appropriate mitigation strategies have been developed by Wakefield’s experienced management team.
The stable outlooks reflect AM Best’s expectation that Wakefield will maintain its very strong balance sheet assessment, with favorable projected underwriting and overall operating performance contributing toward surplus growth.
Negative rating action may occur if underwriting and/or overall operating performance compares unfavorably to expectations. Furthermore, negative rating action also may occur if risk-adjusted capitalization were to decline considerably.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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