Ratings Can Help Captives Improve Flexibility

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Many captive insurers have shown increasing interest in pursuing a rating to improve underlying economics and increase their flexibility regarding risk-transfer options. A.M. Best often turns out to be the rating agency of choice because of its universal acceptance and the explicit requirements by lenders and business partners that stipulate minimum ratings for insurance purposes.

With a rating, a captive can write business directly and avoid posting collateral to support its credit risks. This is especially important as a captive ages and loss reserves build up, increasing collateral costs for the outstanding liabilities. 

Guy Carpenter’s briefing, Benefits of A.M. Best Ratings, provides more information about the benefits of an A.M. Best rating for a captive, as well as the methodology for obtaining a rating. Our Rating Advisory Team consists of experienced professionals who help clients manage their rating-agency relationship, working in collaboration with other Guy Carpenter teams to provide best-in-class solutions.


Benefits of A.M. Best Ratings

Captive insurers have many motivations for having an A.M. Best rating, ranging from operational efficiencies to managing market cycles.