A.M. Best has affirmed the long-term issuer credit rating of a- and the financial strength rating of (A) Excellent of United Insurance Company (UIC) and its Luxembourg-based subsidiary, United Re (Europe) S.A..
The outlook of the ratings is stable.
The ratings are reflective of UIC’s balance sheet strength, categorised as very strong, as well as its adequate operating performance, neutral business profile and appropriate risk management.
The very strong assessment of UIC’s balance sheet is a result of its very strong level of risk-adjusted capitalisation (according to Best's Capital Adequacy Ratio), healthy liquidity, financial flexibility, quality of capital and reinsurance programme.
UIC’s operating performance has been profitable historically, driven by underwriting performance and investment income in most years.
Some volatility in the company’s reinsurance underwriting and investment returns has caused results to fluctuate over a five-year period.
Following UIC realigning its investment strategy in 2016, healthy investment income was recorded in 2017 and is projected moving forward.
The company’s overall operating performance is assessed as adequate and its business profile was deemed to be neutral.
UIC is one of the longest-tenured alternative risk vehicles by A.M. Best and has an established reputation within the captive insurance market.
The company’s risk pooling programmes have been its hallmark business since formation.
Additionally, UIC is currently in the process of expanding its profile by entering the US insurance market.
A.M. Best considers UIC’s enterprise risk management to be appropriate for its overall business profile.