The rating affirmations reflect Spirit’s and Radius’ excellent risk-adjusted capitalization, sound risk management practices, history of profitable business written from a predecessor captive, as well as the position they hold as the captive insurers for their ultimate parent,
Partially offsetting these positive rating factors are Spirit’s and Radius’ exposure to large losses due to the limits offered on their respective policies and their significant dependence on reinsurance protection. In addition, Spirit’s terrorism risk exposure remains relatively high on a gross basis.
Spirit provides property damage, business interruption and excess liability insurance to
Business is written separately by Spirit and Radius, and each company has a history of strong underwriting results and operating returns. The captives’ loss experience has remained favorable due in part to no material catastrophe events and the strong loss control programs at the parent.
Additionally, Spirit provides terrorism coverage to its parent. While terrorism risk exposure remains relatively high on a gross basis, concerns are mitigated by reinsurance protection afforded by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA). However, due to the temporary nature of TRIPRA,
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