A.M. Best has affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a" of Eastern Re, SPC. The outlook for both ratings is stable.
The ratings recognize Eastern Re's strategic affiliation with its holding company, Eastern Insurance Holdings and the member companies that make up the Eastern Alliance Insurance Group, historically profitable operating results and sound standalone capitalization.
These positive rating factors are partially offset by Eastern Re's exclusive reliance on EIHI and EAIG for production of all of its business.
Eastern Re is a cell captive, whose general cell is a wholly owned subsidiary of EIHI and utilizes the expertise of Employers Alliance, a Pennsylvania-domiciled insurance services provider and member of EAIG that acts as the third party administrator and provides services for all of the cells of Eastern Re.
Eastern Re issues preferred shares to its cell owners, which are agent or group captives that purchase workers' compensation coverage from EIHI. These agent and group captives participate in the profits and losses of the cell for which they are the owners. This dynamic provides added incentive to the agent or group captive to prevent adverse selection for the business being assumed by Eastern Re.
