AM Best has assigned a financial strength rating of ‘B++’ (Good) and a long-term issuer credit rating of ‘bbb’ (Good) to Quasar Insurance Company.
Based in South Carolina, Quasar is a single-parent captive established to provide liability insurance to its sister affiliate, DSLD Homes, as well as its other affiliated companies.
The outlook for both of these ratings was ‘stable’.
The ratings reflect Quasar’s balance sheet strength, which AM Best assesses as adequate, as well as its efficient operating performance, limited business profile, and appropriate enterprise risk management.
Quasar’s overall balance sheet strength assessment is supported by its strong level of risk-adjusted capitalisation, as measured by AM Best’s Capital Adequacy Ratio, as well as a conservative investment portfolio and adequate reserves and liquidity.
However, the assessment is partially offset by the company's lack of use of reinsurance to protect surplus in the event of natural catastrophes, and the high-limit offering relative to the captive’s surplus.
The company's operational performance analysis is primarily based on audited results from the most recent five-year period, as well as the company's ability to execute its strategic business plan and meet forecast operating results.
The captive has reported strong results in recent years, fueled by underwriting and investment income, boosting the company's surplus growth. Forecasts indicate that its performance will remain adequate, with projected overall earnings for the next five years.
Premiums are primarily derived from the general liability, subcontractor default and builder risk lines of business and are expected to remain consistent in the near term, based on company forecasts.
Enterprise risk management is effectively managed under the ultimate parent company, which has adopted an active risk management approach. This enables all affiliated subsidiaries to align their risk management practices with the organisation's overall strategic direction and risk appetite.
