A.M. Best Affirms Credit Ratings of Members of ProSight Specialty Group

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of New York Marine and General Insurance Company (New York, NY) and its wholly owned subsidiaries, Gotham Insurance Company (New York, NY) and Southwest Marine & General Insurance Company (Scottsdale, AZ) (collectively referred to as ProSight Specialty Group). The outlook of these Credit Ratings (ratings) is stable.

Concurrently, A.M. Best has affirmed the Long-Term ICR of “bbb-” of ProSight Global Holdings Limited. In addition, A.M. Best has affirmed the Long-Term ICR of “bbb-” and the Long-Term Issue Credit Ratings of “bbb-” on the $140 million 7.5% senior unsecured notes due November 2020 and the $25 million 6.5% senior unsecured notes due November 2020 of ProSight Global, Inc. The outlook of these ratings is stable.

The ratings reflect ProSight Specialty Group’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also reflect the group’s supportive risk-adjusted capitalization, strong market niche position in its core specialty lines of business and generally favorable long-term loss ratio that compares favorably with the composite. The ratings further recognize the strength of the senior management team, and the progress the team has made in improving operating results in 2017 and 2018, which followed a material downturn in operating results in 2015 and 2016 attributed primarily to adverse loss reserve development in the commercial auto liability line. In addition, management has committed itself to improving underwriting performance as demonstrated by its replacing less profitable niches with ones that it believes can be written profitably throughout market cycles. These positive rating factors are offset partially by the group’s elevated reserve leverage measures and limited organic surplus growth over the recent five-year period.

After ceding a sizable volume of profitable U.S. business to the organization’s U.K. operations for more than four years, the group has been retaining this business along with the associated profit since the second quarter of 2017. The U.S. business previously ceded to Lloyd’s was repatriated to ProSight Specialty Group through a commutation agreement whereby the group terminated all sessions to Lloyd’s Syndicate 1110, and the group commuted all reserves as of March 31, 2017. While this further increased reserve leverage, a $50 million capital contribution in April 2017 and additional investment income generated from the consideration has mitigated that impact.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181101006035/en/

A.M. Best

Robert Valenta, +1 908 439 2200, ext. 5291

Senior Financial Analyst

[email protected]

or

Raymond Thomson, CPCU, ARe, ARM, +1 908 439 2200, ext. 5621

Associate Director

[email protected]

or

Christopher Sharkey, +1 908 439 2200, ext. 5159

Manager, Public Relations

[email protected]

or

Jim Peavy, +1 908 439 2200, ext. 5644

Director, Public Relations

[email protected]

Source: A.M. Best