A.M. Best has affirmed the financial strength rating of “A (Excellent)” and issuer credit rating of “a” of Eastern Re. The outlook for both ratings is stable.
The ratings recognise Eastern Re’s affiliation with its holding company, Eastern Insurance Holdings, and the member companies that comprise the Easter Alliance Insurance Group, its profitable operating results and its stand-alone capitalisation.
“These positive rating factors are partially offset by Eastern Re’s exclusive reliance on Eastern Insurance Holdings and Eastern Alliance Insurance Group for the production of all its business, as well as the mono-line orientation of Eastern Re, which primarily acts as a workers’ compensation reinsurer,” said the rating firm in a recent statement.
Eastern Re is a segregated portfolio company or cell captive. Its general cell is a wholly owned subsidiary of Eastern Insurance Holdings, which also indirectly owns Eastern Alliance Insurance Group, and all these workers compensation insurance companies produce business through regional agents.
The insurance companies provide both fronting capabilities and reinsurance protection to Eastern Re.
Factors that could result in either an upgrading or a downgrading of Eastern Re’s ratings include a change in the overall risk profile of Eastern Alliance Insurance Group as well as a change in the consolidated capital strength of the segregated cells.
