OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) of PURE Specialty Exchange (Scottsdale, AZ). Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Privilege Underwriters Reciprocal Exchange (Fort Lauderdale, FL). The outlook of these Credit Ratings (ratings) is stable. These insurance entities comprise PURE Insurance Group.
The ratings reflect PURE Insurance Group’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The strong balance sheet assessment reflects PURE Insurance Group’s very strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and AM Best expects the group’s risk-adjusted capitalization to remain in the very strong category. Additional positive assessment factors include financial flexibility, high quality assets, and a conservative investment portfolio. Partially offsetting these positive factors are the group’s exposure to catastrophe losses, its reliance on reinsurance, and a capital structure that is comprised mostly of surplus notes.
Finally, the ratings consider implicit and explicit support provided by Tokio Marine Holdings, Inc. (TMHD), and its lead insurance operating company, Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF). TMNF’s support of PURE Insurance Group aligns with TMHD’s strategy of expanding its international business through acquisition in developed and emerging markets, in addition to providing diversification of revenues and customer segments.
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