AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of “a-” (Excellent) of Accelerant Holdings’ rated subsidiaries, including Bermudian-based Accelerant Re Ltd.

The other rated subsidiaries are Accelerant Insurance Europe SA of Belgium, Arkansas-based Accelerant Specialty Insurance Company, Delaware-based Accelerant National Insurance Company, and Accelerant Re (Cayman) Ltd.

The companies are wholly-owned subsidiaries of Accelerant Holdings, a non-operating holding company in the Accelerant group.

The outlook of these credit ratings is stable.

In AM Best’s view, AIE, ASIC, ANIC, Accelerant Re Bermuda and Accelerant Re Cayman are strategically important to, and integrated within, Accelerant.

AIE, ASIC and ANIC play key roles in the group’s strategy of providing insurance capacity to managing general agents in the United Kingdom, the European Union and the United States.

Accelerant Re Cayman and Accelerant Re Bermuda are internal reinsurers within the group and are strategically important to their reinsurance and capital management strategies.

Accelerant’s licensed re/insurance carriers benefit from net worth maintenance agreements with the holding company.

The ratings reflect the consolidated balance sheet strength of Accelerant, which AM Best assesses as very strong, as well as the group’s adequate operating performance, limited business profile and appropriate enterprise risk management.

Accelerant was established in 2019 to provide insurance capacity to MGAs in the United Kingdom, Europe and the United States. The group also offers underwriting, claims handling and analytical support to its MGA partners.

Accelerant reported gross written premium of over $1.1 billion in 2022, supported by capital and surplus of over $300 million and senior debt of approximately $100 million, as of April 2023.

Accelerant’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s capital adequacy ratio. Risk-adjusted capitalisation is projected to remain at this level as the group executes its business plan.

The balance sheet strength assessment also considers Accelerant’s good financial flexibility, low risk investment portfolio and strong liquidity profile.

The group has a high dependence on reinsurance due to its strategy to retain a low level of underwriting risk.

The associated credit risk is mitigated by the use of a diverse panel of financially strong counterparties.

The adequate operating performance assessment considers Accelerant’s business plan, taking into account heightened execution risk during its start-up phase.

AM Best expects the group to generate profitable underwriting returns over the longer term, reflective of the historical performance of its MGA members.

Furthermore, the group’s fee-based income arising from its distribution related activities is expected to have significant contribution to its earnings.