The Bermudian insurer of an American supplier of wood and wood products has been recognised for outperforming traditional markets in key metrics.

AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of Ardellis Insurance Ltd. The outlook of the credit ratings is stable.

Ardellis is a wholly owned subsidiary of UFP Industries Inc, and provides reimbursement coverage for medical stop-loss, workers’ compensation, general liability, auto liability, auto physical damage, property and trade receivables to its parent.

UFP, which began in Michigan nearly 70 years ago as a lumber supplier to the housing industry, is today a multibillion-dollar holding company with subsidiaries around the globe that serve retail, industrial and construction markets.

The credit ratings reflect Ardellis’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

Ardellis also assumes medical stop-loss exposure from third parties, which represents approximately half of the company’s premiums.

Ardellis’s balance sheet strength remains very strong, supported by the strongest level of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio.

On a five and ten-year average basis, the ratings agency said, Ardellis’s combined and operating ratios have outperformed the general property and casualty industry driven by the company’s loss control, safety practices and low overhead.

AM Best notes that 2022 earnings were impacted by a few large medical stop-loss claims, causing an uptick in the reported loss and loss adjustment expense ratios.

Despite that, Ardellis achieved a net operating profit for the year.