A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and the long-term issuer credit rating (ICR) of “a+” of Ameriprise Captive Insurance Company (ACIC).
Concurrently, the ratings agency has affirmed the FSR of A+ (Superior) and long-term ICR of “aa-” of Riversource Life Insurance Company’s and its wholly owned subsidiary, Riversource Life Insurance Company of New York–the two companies represent the key life/health insurance subsidiaries of Ameriprise and are collectively known at Ameriprise Financial Group.
Additionally, Ameriprise Financial had its FSR of “aa-” and its existing long-term issue credit ratings.
The outlook for all of these ratings is stable.
ACIC’s ratings reflect its balance sheet strength, categorised as “strongest”, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The Vermont-based captive’s balance sheet assessment is supported by risk-adjusted capitalisation being at the strongest level and a clean balance sheet with no debt.
ACIC has generated strong operating performance as demonstrated by its five-year average pre-tax return on revenue and equity ratios that compare favourably with the averages for the commercial casualty composite and benefits from a very low expense ratio.
The ratings agency expects the captive to remain strong in the near term.
Due to ACIC’s narrow market focus as a single parent captive, serving just its parent for a limited amount of exposure, its business profile is assessed as limited.
The captive provides various coverages to its parent in the form of errors and omissions policies, a workers’ compensation deductible reimbursement policy, and fidelity bonds.
ACIC’s ERM is assessed as appropriate, as the company has adopted the risk management strategies employed by Ameriprise.
ACIC benefits from its strategic importance as a single parent captive insurance provider.
