OLDWICK, N.J. — (BUSINESS WIRE) — #insurance—AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of SafePort Insurance Company (SafePort) (Raleigh, NC).
The Credit Ratings (ratings) reflect SafePort’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The negative outlooks reflect the deterioration in operating performance in recent years, particularly in comparison with the current adequate assessment. The recent deterioration is driven primarily by elevated catastrophe losses from Hurricane Laura in 2020 and winter storm Uri and Hurricane Ida in 2021. While management has taken actions to stabilize results, the ultimate effectiveness in returning performance to historical norms is uncertain.
The negative outlooks also reflect the potential for pressure on the balance sheet strength assessment given new premium growth and the related statutory strain it creates. Until recently, SafePort was a relatively inactive Florida-based property-oriented insurer, supporting the limited business profile assessment. Beginning in 2019, SafePort experienced a significant increase in direct premium written attributed to a new homeowners program written in South Carolina and Texas through SageSure, an insuretech managing general agent focused on underserved markets. SageSure has an ownership in SafePort through an intermediate holding company, along with IAT Insurance Group, Inc. (IAT), which maintains control. Management has taken actions through SageSure and IAT to stabilize SafePort’s balance sheet, which includes de-risking its investment portfolio and a recent capital contribution.
AM Best will continue to monitor the execution of near-term plans as communicated by management and their impact on alleviating pressure on SafePort’s operating performance, as well as the company’s plan for potential growth in premiums.
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 Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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