AM Best Affirms Credit Ratings of Constitution Insurance Company

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Constitution Insurance Company (Constitution) (Cambridge, NY). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Constitution’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Constitution is wholly owned by Steven Menzies, chief executive officer, and participates in a professional lines quota share reinsurance business from a commonly owned insurer, Texas Insurance Company, consolidated within the North American Casualty Group. This reinsurance agreement was put in place in 2025, retroactive to Jan. 1, 2025. Due to delays in regulatory approvals, premiums only started to flow in 2026. Constitution is well-capitalized on a risk-adjusted basis as of year-end 2025 and holds no debt on its balance sheet. The company maintains a conservative investment portfolio composed of 75% short-term U.S. Treasury bills and notes with the remaining invested assets in preferred shares and U.S. Treasury longer-term bonds. In 2025, investment income increased substantially due to the sale of real estate investments, when Constitution was able to earn accrued interest.

Constitution’s evolving business profile has resulted in volatility in performance metrics over the last several years, but these have largely trended in a favorable direction as operations stabilized. Combined ratios prior to the workers’ compensation treaty it terminated in 2025 were less favorable and were driven primarily by low premium volumes, as the company transitioned to its current business plan. This occurred in 2025 as well, though once the new treaty is fully in place results are expected to stabilize in the near future.

Constitution’s business profile maintains some geographic and product concentrations, though the new quota share contract in place has alleviated concerns to some degree as it has potential to increase diversification and improve overall performance.

Constitution’s ERM practices are appropriate for its size and scope. Risk management is a focal point for management, and the company is well-attuned to the risks impacting its markets. The company maintains well-established conservative underwriting guidelines that have been historically profitable.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.