AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Bermudian-based Vantage Risk Ltd and its Delaware-domiciled affiliates, Vantage Risk Specialty Insurance Company and Vantage Risk Assurance Company, which does business as Vantage Group.

The outlook of these credit ratings is stable.

The agency said the ratings reflect Vantage Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating affirmations follow an active initial three years of operations for the group, AM Best said.

In the first two years, underwriting income was adversely impacted by elevated catastrophe losses; however, as Vantage Group has continued to grow to scale in 2023 and moved property catastrophe business off its balance sheet through its insurance-linked securities vehicle, AdVantage Retro I Ltd, its underwriting results have improved.

AM Best said it expects full year combined ratios for 2023 to benefit from these changes and track closer to break even, leading to the group’s first full year of operating profitability.

This strategy is expected to provide Vantage Group with accretive income while continuing to reduce volatility in its operating results in future years, the agency said.

AM Best said: “Vantage Group continues to expand its primary insurance operations, after a slow start in 2021, due to various operational challenges.

“As the group continues to execute its business plans, the reinsurance portfolio has become relatively smaller than the primary portfolio; and thus, has less of an impact to its bottom line.

“While Vantage Group’s diversification and capabilities have expanded significantly since launch, some level of operational risks remains as new business seasons.

“AM Best will continue to monitor the group’s progression as it enters its fourth year of operation.”

The agency said it anticipates that Vantage Group’s operating performance will continue to improve as its business plan is executed.