The captives, Castle Harbour Insurance Limited, Harrington Sound Insurance Limited and Colliers Bay Insurance Limited, provide tailored insurance coverage to subsidiaries of the parent for certain property and casualty risks.
Partially offsetting the positive rating factors are the captives’ relatively large limits in its general liability and property lines of business, however, A.M. Best recognises the substantial financial resources of the captives and its parent.
According to A.M. Best, the captives’ management and corporate strategy is a strengthening factor of its ratings and its enterprise risk management practices are strong.
The rating agency expects the captives’ future operating performance to be “stable but strong, and the stable earnings profile should further support the companies in controlling growth and business writings, which are consistent with the captives’ capital and surplus position”.
The agency said: “The outlook of the captives could be raised if operating performance improves and risk-adjusted capital remains supportive of the ratings. Negative rating pressure could occur if underwriting performance declines and demonstrates volatility that negatively impacts earnings and capitalisation over time.”
“Negative rating pressure could also result if there is a material shift in risk profile that could potentially undermine the stability and profitability of the company.”