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FOR IMMEDIATE RELEASE
OLDWICK - JULY 31, 2014 09:25 AM (EDT)
A.M. Best has placed under review with negative implications the financial strength ratings of A- (Excellent) and issuer credit ratings of "a-" of KnightBrook Insurance Company (KBIC) (headquartered in Valley View, PA) and Knight Insurance Company Ltd. (KIC) (Grand Cayman, Cayman Islands).
The under review with negative implications status reflects KBIC and KIC's heightened execution risk due to significant business growth in 2013 and the uncertainty regarding loss-reserve and premium adequacy from this new business. These concerns are amplified by sizable adverse loss development experienced in the first quarter of 2014, which resulted in restatement of year-end 2013 regulatory/statutory filings.
KBIC and KIC's business model calls for organic growth resulting in material increase of its books of businesses within relatively volatile and competitive markets. At this point, KBIC and KIC are adequately capitalized for currently known exposures; however, the ratings will remain under review until further quantitative analysis can be completed.
A.M. 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.
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.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.