AM Best Affirms Credit Ratings of Benchmark Insurance Group Members and Trean Insurance Group, Inc.
The ratings of BIG reflect its 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 (ERM).
BIG’s balance sheet strength assessment reflects a highly rated, diversified fixed-income portfolio and consistent loss reserve discipline offset by elevated net underwriting leverage and a sound, albeit declining, liquidity position. The group has significant reinsurance dependence that subjects it to material counterparty credit risk. However, to mitigate this credit risk, BIG holds approximately
The group reported declining operating results in 2021 as a result of several unusual underwriting losses. However, BIG’s operating performance assessment reflects its strong overall underwriting profitability and net investment income that has produced double-digit pre-tax operating results and returns on equity, which compare favorably with AM Best’s workers’ compensation composite’s five-year averages at
AM Best views the group’s business profile as limited, as it reflects a concentration of business in the workers’ compensation line of business. To reduce its product concentration, BIG has added programs in accident & health, commercial auto, general liability and the homeowners lines of business, as well as fronting relationships for several captive insurers. Additionally,
Although BIG continues to maintain significant dependence on reinsurance, it now retains an increased percentage of risk from its more profitable programs. Given management’s extensive experience in providing a market for small workers’ compensation program carriers, BIG continues to reduce its overall credit risk to a manageable level with risk management capabilities in line with its business profile.
AM Best views BIG’s ERM structure as appropriate, as the group’s program includes risk appetite and tolerance statements that focus on concerns specific to its business profile. The group’s ERM framework benefits from an experienced board of directors and executive management teams at TIG and BIG, which are cognizant of the key elements in maintaining and enhancing a competitive advantage in their program niche.
At
This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Source: AM Best