AM Best confirms the credit ratings of Global Indemnity Group, LLC and its subsidiaries

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OLDWICK, NJ–(BUSINESS WIRE)–AM Best affirmed the financial strength rating (FSR) of A (Excellent) and the long-term credit rating (Long-term ICR) of “a” (Excellent) of the US operating subsidiaries of Global Indemnity Group, LLC (Global Indemnity) (Delaware) [NYSE: GBLI]. At the same time, AM Best confirmed the long-term ICR of “bbb” (good) for overall compensation. (See below for full list of companies and ratings). The outlook for these Credit Ratings (ratings) is stable.

The ratings reflect Global Indemnity’s balance sheet strength, which AM Best assesses as the strongest, as well as its adequate operating performance, neutral business profile and appropriate management of business risks.

The balance sheet strength rating reflects Global Indemnity’s risk-adjusted capitalization being at the highest level, as measured by Best’s capital adequacy ratio (BCAR), backed by a conservative investment portfolio, conservative booking practices and increased financial flexibility through its access to capital. markets. While prior year claims reserve development had always been favorable in the past, the group reported a slight unfavorable reserve development in 2021 due to two programs that have since been cancelled. Through Global Indemnity’s six-member inter-company pool, the group targets a diverse mix of specialist niche businesses not typically offered in the standard insurance market. In April 2022, Global Indemnity repaid its $130 million subordinated debt and currently has no long-term debt in its capital structure.

The group’s operating result has generally behaved in line with its peers over the past five years. While the core specialty business segment, which focuses on small to mid-market customers, has historically been profitable, other operating segments have been more volatile, primarily due to exposure to catastrophes, including the wind and forest fires. In October 2021, the group sold renewal rights to its manufactured home and residential products to K2 Insurance Services, which was part of the group’s specialty properties segment and inherited from its acquisition of American Reliable Insurance Company in 2015. This move continued with Global Compensation’s goal of reducing catastrophe exposure by exiting industries and states that have concentrated exposures.

Global Indemnity’s activity profile is rated neutral. The group is made up of several long-standing and well-recognized franchises that offer a diverse mix of business across multiple distribution channels. In 2021, Global Indemnity appointed David S. Charlton as Managing Director. He is a seasoned senior executive in the property and casualty insurance industry for 34 years, with particular expertise in excess and surplus, binding authority, small business and other specialty insurance – experience well aligned with that of Global Indemnity. The same year, the group also appointed Reiner Mauer as Chief Operating Officer, who, along with other newly appointed business leaders, had a very successful career managing small business underwriting operations. Along with these appointments, AM Best expects the group to once again focus on core businesses comprised of small and medium-sized businesses of a specialized nature.

The FSR of A (Excellent) and the long-term KPIs of “a” (Excellent) have been confirmed with a stable outlook for the subsidiaries of Global Indemnity Group, LLC:

  • Reliable American Insurance Company

  • Diamond State Insurance Company

  • Penn America Insurance Company

  • Penn-Patriot Insurance Company

  • Penn-Star Insurance Company

  • United National Insurance Company

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 relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Ratings, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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