New York
02 November 2017
Reporter: Becky Butcher

KBRA releases new captive rating methodology

Kroll Bond Rating Agency (KBRA) has published its new global captive rating methodology.

The methodology describes the major quantitative and qualitative factors KBRA considers when assessing the financial strength of captive insurers.

KBRA’s approach to analysing captive insurers includes a comprehensive evaluation of key quantitative measures, such as stress testing, as well as qualitative elements consisting of three rating determinants: balance sheet management, operating fundamentals, and captive profile and risk management.

In its qualitative rating determinant one, the rating agency examines the captive insurer’s approach to managing its balance sheet, the starting point of which is capital.

In determinant two, KBRA reviews the organisation’s operating fundamentals, including historical pre- and post-dividend earnings trends, various profitability ratios, and pro forma earnings for expected future scenarios.

In determinant three, it considers the captive’s domicile, the effectiveness of its risk management framework as well as the owners overall involvement with, and strategic vision for, the captive.

As part of the methodology, the agency also formally calculates the ability and willingness of the owner to financially support the captive when needed, especially in its early years of operation.

For single parent captives, it will assess the credit quality of the parent company utilising its general corporate rating methodology.

However, this methodology does not apply to any type of cell captives and risk retention groups licensed and regulated as traditional property and casualty insurance companies in their state of domicile.

Click here to access the full methodology.

More news
The latest news from Captive Insurance Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
AIG to acquire Validus
22 January 2018 | New York | Reporter: Ned Holmes
AIG has agreed to acquire all outstanding common shares of Validus, the provider of reinsurance, primary insurance and asset management services, in a deal worth $5.56 billion
South Carolina welcomes 15 new captives
19 January 2018 | Charleston | Reporter: Becky Butcher
The South Carolina Department of Insurance has licensed a total of 15 new captives in 2017
A.M. Best withdraws SARRG ratings
19 January 2018 | Oldwick | Reporter: Ned Holmes
A.M. Best has withdrawn the credit ratings of SARRG, after the company requested to no longer participate in the rating agency’s interactive rating process
Regions Insurance promotes Mike Breedlove
19 January 2018 | Alabama | Reporter: Ned Holmes
Regions Insurance has appointed Mike Breedlove as its new executive vice president of property and casualty operations
Advantage opens Vermont office
18 January 2018 | Vermont | Reporter: Ned Holmes
Advantage Insurance has opened a new office in Vermont to support its growing captive insurance services business
Tennessee captive premiums exceed $1 billion mark in 2017
18 January 2018 | Nashville | Reporter: Ned Holmes
Tennessee-domiciled captive insurance companies exceeded $1 billion in written premiums in 2017 for the first time, according to year-end figures from TDCI
JLT IM hires new senior account manager
17 January 2018 | Vermont | Reporter: Ned Holmes
JLT IM has appointed Jocelyn Lyman as a new senior account manager