Credit ratings agency AM Best has assigned Florida Insurance and Reinsurance Company (Florida Re), a subsidiary of global independent re/insurance conglomerate, MNK Group Holdings, a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent).
According to AM Best, Florida Re’s ratings reflect its “very strong” balance sheet strength, adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM).
The ratings agency explained that, as a start-up, the balance sheet strength assessment accounts for current and prospective risk-adjusted capitalisation using management’s communicated five-year business plan.
Florida Re was capitalised through a cash contribution from the ultimate business owner and currently does not have any outstanding debt.
The initial operating performance rating is also based on the company’s five-year business plan, which is subject to successful implementation over the planning horizon. Florida Re’s business plan calls for a mix of insurance business conducted in the United States and reinsurance business, which is assumed to be from international markets.
The limited business profile considers the Florida-domiciled re/insurer’s focus on domestic commercial property, specifically condo associations, while its reinsurance business will focus on assumed property, among other lines. Florida Re is expected to start writing business by the end of 2025, and will leverage partnerships with condo associations for the insurance segment, along with its relationship with affiliate managing general agents for the reinsurance segment.
Florida Re’s current appropriate ERM could change, given the nature of a start-up organisation, which comes with execution risk. Its controls and tolerances are in place that will grow as the company expands, evolving the ERM. AM Best emphasises, these ratings are dependent on Florida Re’s execution of its business plan effectively as presented.
About the Author
