OLDWICK, N.J., October 20, 2021--(BUSINESS WIRE)--AM Best has removed from under review with positive implications and upgraded the Financial Strength Rating to A- (Excellent) from B+ (Good) and the Long-Term Issuer Credit Rating to "a-" (Excellent) from "bbb-" (Good) of Concert Insurance Company (Concert) (Deer Park, IL). The outlook assigned to these Credit Ratings (ratings) is stable.
Concert’s ratings reflect its recently enhanced balance sheet strength, which AM Best now assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating upgrades reflect Concert’s enhanced capitalization and overall improved balance sheet position, which considers the recent capital raise by its new owners, Freedom Underwriters LLC, Century Equity Partners and WT Holdings, Inc. While a portion of the proceeds have been infused into Concert, the remainder of the capital resides at the holding company, Concert Group Holdings, Inc., and will be used to fund future growth and facilitate broader licensing and expansion initiatives going forward.
On a projected basis, Concert’s level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is categorized as strongest and is supportive of its planned growth initiatives and increased reinsurance utilization over the next several years. As the new management team has extensive relationships in the reinsurance and insurance-linked securities (ILS) markets, AM Best expects Concert’s reinsurance panel to be well-balanced between the traditionally rated market and fully collateralized reinsurance market, as well as being highly diversified.
Concert’s operating performance assessment of adequate is based on management’s clearly defined business plan and projections that are closely aligned with its new strategy. The ratings also reflect Concert’s limited business profile, which is in its early stages and is expected to improve over time. The company’s ERM assessment of appropriate is based on Concert now being directed and governed by new leadership and a board that has established its own risk framework, risk tolerances and risk appetite.
Concert was founded by a group of experienced insurance industry executives in response to growing demand from the fronting market. The company will provide fronting products and services, as well as offer options for alternative risk transfer structures, leveraging the expertise and relationships of its management team and strategic partners. The ratings also consider the execution risk inherent in a "start-up" like organization and the potential challenges management may encounter in executing its plans. While the company’s existing relationships and business pipeline should achieve projections effectively, the scaling of operations may present challenges in reaching the planned profitability. As is customary, AM Best will closely monitor Concert’s results relative to the business plans to ensure any deviations remain within the scope of the current rating assessments.
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.
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.
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