A.M. Best Affirms Ratings of Seaworthy Insurance Company
A.M. Best has affirmed the financial strength rating of A+ (Superior) and the issuer credit rating of “aa” of Seaworthy Insurance Company (Seaworthy) (Annapolis, MD). The outlook for both ratings is stable.
The ratings reflect Seaworthy’s strong risk-adjusted capital, historical favorable experience within the ocean and inland marine specialty niche and the implicit and explicit support provided by the ultimate parent, Berkshire Hathaway Inc. (Berkshire) [NYSE:BRK.A and BRK.B], and members of the Berkshire organization.
The ratings take into account significant reinsurance protection provided by National Indemnity Company (NICO) (Omaha, NE) through a 75% quota share agreement, along with an additional reinsurance agreement providing 100% coverage for named windstorms. In addition to these programs, GEICO Corporation now serves as an agent for Seaworthy’s inland marine (boat) business.
These positive rating factors are partially offset by Seaworthy’s product concentration and the execution risk with the expansion of business outside its historical business distribution model.
Negative rating action could occur if capitalization and/or operating performance fall markedly short of A.M. Best’s expectations as a result of a significant deterioration in loss trends or premium volume growth exceeding Seaworthy’s risk-adjusted capital position. Given the company’s limited business profile, the rating is subject to sudden shifts in the market or an unforeseen disruption in distribution. Because of the breadth of the relationship between Seaworthy and other Berkshire companies, change in the ratings or outlooks of any of the associated insurance companies may impact the rating of Seaworthy.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Rating Members of Insurance Groups
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright (c) 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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