OLDWICK, N.J., December 21, 2023–(BUSINESS WIRE)–AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of SILAC Insurance Company (SILAC) (Salt Lake City, UT).
These Credit Ratings (ratings) reflect SILAC’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).
The negative outlooks reflect the decline in quality of SILAC’s reinsurance counterparties and risk-adjusted capital due to increasing reinsurance leverage, as measured by Best’s Capital Adequacy Ratio (BCAR). SILAC has entered into several reinsurance agreements with unrated reinsurers and maintains relatively high reinsurance leverage to control capital strain. While SILAC’s capital and surplus has grown over the past year due to the retention of favorable earnings and capital contribution from investors, its risk-adjusted capitalization is assessed as weak. AM Best also notes the somewhat limited financial flexibility of SILAC should additional capital be needed to fund new growth or…
