AM Best Affirms Credit Ratings of Privilege Underwriters Reciprocal Exchange; Downgrades Credit Ratings of PURE Insurance Company
AM Best announced that the Financial Strength Rating (FSR) and the Long-Term Issuer Credit Rating of Privilege Underwriters Reciprocal Exchange (PURE) have been affirmed. The company has an FSR of A+ (Superior) and Long-Term (Long-Term ICR) of “aa-” (Superior).
In addition to affirming these ratings, the rating agency simulatenously announced that it also down downgraded the ratings of PURE Insurance Company’s (PIC) FSR to A- (Excellent) from A+ (Superior) as well as its Long-Term ICR to “a-” (Excellent) from “aa-”.
“The ratings of PURE reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings consider implicit and explicit support provided by the ultimate parent, Tokio Marine Holdings, Inc., its lead insurance operating company, Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF), and the affiliation between the U.S. subsidiaries of TMNF.
PURE aligns with TMNF’s strategy of expanding its international business through acquisition in developed and emerging markets, in addition to providing diversification of revenues and customer segments. Partially offsetting these positive factors is company’s dependence on reinsurance and exposure to catastrophe events.
The ratings of PIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, very limited business profile and appropriate ERM. The negative rating actions reflect the fact that PIC is essentially in run-off as a pooling agreement between PURE and PIC was terminated in January 2022. It is AM Best’s expectation that TMNF will continue to support PURE as it looks to wind down PIC.
The rating actions on PIC have no impact on AM Best’s view of PURE’s financial strength, as evidenced by the rating affirmations of PURE.”
Source: AM Best
