AM Best has affirmed the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit ratings of ‘a-’ (Excellent) of Prism Assurance, single-parent captives of Apogee. The outlook of these credit ratings is 'stable’. The ratings reflect Prism’s balance sheet strength, which AM Best assesses as ‘very strong’, as well as its adequate operating performance, limited business profile, and appropriate enterprise risk management. According to the rating agency, the company has strong liquidity measures, and affords financial flexibility through the support of its parent company, Apogee. In addition, AM Best notes that the firm continues to generate consistent annual net profits, primarily from a steady flow of royalty and investment income, which adequately offsets any volatility in underwriting and generally allows for healthy profits each year. Prism’s operations also benefit from its inherent low expense structure as a captive, driving an underwriting expense ratio that compares very favourably to its peers. AM Best assesses Prism’s business profile as limited, as the company provides very specific lines of coverage to Apogee, although its risks have a level of geographical diversification reflecting the scope of the parent’s operations. As a captive, Prism is an integral component of Apogee’s overall organisation’s risk management capability and awareness. As a result, the company works cohesively with business units across the overall organisation to reduce claims severity and frequency.
