OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Trusted Resource Underwriters Exchange (TRUE) (Tampa, FL). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect TRUE’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The balance sheet strength assessment of strong is based on initial risk-adjusted capital capacity that meets AM Best guidelines for newly formed entities through a five-year start-up period. Capital levels are measured against a risk adverse investment strategy and TRUE’s intentions to maintain a robust reinsurance program backed by highly rated reinsurers. AM Best assesses TRUE’s operating performance as adequate based on the exchange’s clearly defined five-year business plan that contemplates implementation and execution risk for the new exchange. The company’s business profile is considered limited. TRUE will initially operate with a concentration in Florida with a select market and will require a period of time to establish its brand. The company’s ERM program, considered appropriate, will adopt a proven structure in the “three lines of defense” approach. The assigned ratings consider financial and operational support provided by American Family Insurance Group, which is shown by its long term commitment of capital to TRUE through surplus notes, anticipated participation in the reinsurance program and supporting select day-to-day services.
Negative rating action could occur with declines in risk-adjusted capital, actual results falling adversely outside the initial projections, the enterprise being unable to gain traction within the parameters of its business profile, or risk appetite and tolerance levels proving to be inadequate for the organization’s profile.
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