AM Best Revises Outlooks to Negative for SteadPoint Insurance Company

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of SteadPoint Insurance Company (SteadPoint) (Nashville, TN).

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

The negative outlooks reflect AM Best’s concern around SteadPoint’s internal control environment and consistency of its financial oversight processes as it continues to expand. Although the company continues to focus on enhancing its overall governance and ERM program, there remains heightened execution risk surrounding its ongoing strategic growth initiatives. A sudden collateral adjustment by a third-party partner during the end of 2024 that materially impacted SteadPoint’s capital highlights the need for stronger oversight and planning within the finance function, contributing to the negative outlook. AM Best notes that issues have been addressed promptly when identified, and the company has since taken measures to strengthen its financial reporting framework and governance. This includes engaging established third-party accounting partners, enhancing internal review processes and continuing to build SteadPoint’s leadership team.

The negative outlooks further consider SteadPoint’s declining operating performance trends. While results in 2024 and through 2025 thus far have been impacted by expenses associated with the company’s growth objectives, periods of underwriting volatility have also pressured performance. AM Best recognizes the company’s ongoing efforts to refine its underwriting appetite, discontinue business that no longer aligns with its risk profile, and maintain a disciplined and conservative approach to new growth during this period.

SteadPoint is a Tennessee-domiciled workers compensation (WC) insurer that provides coverage in several states in the Southeastern U.S. on a direct basis. Additionally, the company also assumes WC risk from its relationship with the fronting company, Benchmark Insurance Company. AM Best expects that SteadPoint will continue operating under this structure, although has begun the transition to write more direct business on its own paper.

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.