A.M. Best has affirmed the financial strength rating of AmerInst Insurance Company as "A- (excellent)" along with its issuer credit rating (ICR) as “a-”.
Bermuda-based AmerInst Insurance Company acts as a reinsurer of professional liability insurance. The company's shareholders are predominantly certified public accountants (CPAs) or with CPA firms.
The ratings agency has also confirmed the ICR of AmerInst’s holding company, AmerInst Insurance Group, as “bbb”. AmerInst Insurance Group’s ICR is based on its methodology. The ratings outlook for both companies is stable.
“The ratings reflect AmerInst and its parent’s strong capitalisation, experienced management team and niche expertise in providing professional liability coverage,” said a statement from A.M. Best.
“The long term contractual relationship with Crum and Forster Insurance Company as a partner in underwriting, marketing and claims also contributes positively to the ratings.”
The positive ratings could be partly offset by narrow spread of underwriting risk, along with the execution risk that is associated with the implementation of the organisation's new business plan.
"AmerInst intends to continue under its new business plan to employ a conservative reserving methodology under which it historically booked to a higher loss ratio than that of its primary carrier. AmerInst has met A.M. Best’s higher capitalisation requirements, which mandate a more conservative level of risk-based capital for a new business plan."
"A.M. Best will continue to monitor AmerInst as it implements this business plan. Any material negative deviation from the business plan in terms of management, earnings, capitalisation or risk profile could result in negative rating pressure."
