A.M. Best Affirms Ratings of Canopius US Insurance, Inc.

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating of “a-” of Canopius US Insurance, Inc. (Canopius US) (Wilmington DE). The outlook for both ratings is stable.

The ratings reflect Canopius US’ strong risk-adjusted capital and recent changes in the management team. The new members of the team have generated favorable experience with Canopius US’ parent, Canopius Group Limited (Canopius) (Guernsey). This relationship also provides Canopius US with support for its underwriting and claims operations, along with catastrophe exposure management. The ratings also take into consideration the implicit and explicit support Canopius US receives from its ultimate parent, Sompo Japan Nipponkoa Insurance Inc. (Sompo Japan), one of the largest insurers in Japan and the lead insurance company for Sompo Japan Nipponkoa Holdings, Inc.

These positive rating factors are partially offset by the Canopius US’ consistently unfavorable loss experience up to the present time. These results have been caused by a combination of adverse development in its liability book of business and heavy overhead expenses during formational years.

Concerns with operational performance and execution risks for program improvement in the current business profile make a positive rating action in the near term unlikely. However, a rating upgrade may be considered with the achievement of sustained operating profitability coupled with maintenance of risk-adjusted capital levels. Factors that may lead to a negative rating action could include failure to gain traction from strategic initiatives, continued poor underwriting performance, adverse trends in claims frequency or severity or insufficient premium and cash flow to sustain operating results going forward.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150604006420/en/

A.M. Best Company
Robert Raber, (908) 439-2200, ext. 5696
Senior Financial Analyst
[email protected]
or
Henry Witmer , CPCU, ARM-E, (908) 439-2200, ext. 5097
Assistant Vice President
[email protected]
or
Christopher Sharkey, (908) 439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, (908) 439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company

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