AM Best Assigns Credit Ratings to Members of Falcon Insurance Group
26 July 2024 - 1:07AM
Business Wire
AM Best has assigned a Financial Strength Rating of A-
(Excellent) and Long-Term Issuer Credit Ratings of “a-” (Excellent)
to Falcon Indemnity Company, Inc., Galaxy Indemnity Company, Inc.,
and Golden Eagle Insurance Company, Inc. The outlook assigned to
these Credit Ratings (ratings) is stable. The above-mentioned
companies are collectively known as the Falcon Insurance Group
(Falcon) and are domiciled in South Jordan, UT.
The ratings reflect Falcon’s balance sheet strength, which AM
Best assesses as strong, as well as its strong operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
Falcon’s strong balance sheet strength assessment is supported
by the strongest level of risk-adjusted capitalization, as measured
by Best’s Capital Adequacy Ratio (BCAR) model, including adequate
reserves, partially offset by its high combined retention relative
to surplus. Also, Falcon’s investment portfolio has a high
allocation and concentration in equities, which are diversified,
but still could introduce surplus volatility in frothy markets.
Falcon’s strong operating performance assessment reflects its
underwriting profitability over the last decade, driving metrics
that compare favorably with its peers. AM Best expects Falcon’s
operating trends will remain favorable.
The group’s business profile is assessed as limited. It consists
of three side-by-side ‘captives’ that equally share business under
a joint underwriting agreement. It writes coverage for only one
entity, which is affiliated by partial common ownership. The
entity, Reliable Properties, Inc. (Reliable), is a property manager
with most of its exposure in southern California. The companies
were established to provide direct coverage for Reliable and cover
gaps that are conventionally insurable.
Falcon's ERM framework is appropriate for the size and
complexity of its operations. The group has an informal ERM program
that is evolving. Key risks have been identified and the group has
risk controls and monitoring in place. The group’s loss levels are
historically low and offers limits across its menu of 12 coverages
for low frequency, high severity risks.
The stable outlooks reflect AM Best's expectation that Falcon
will maintain its strong balance sheet strength assessment,
supported by organic surplus growth from consistent underwriting
profitability.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit
www.ambest.com/captive.
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.
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
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
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Kourtnie Beckwith Senior Financial Analyst +1
908 882 1649 kourtnie.beckwith@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Dan Teclaw Director +1 908 882 2390
dan.teclaw@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com