A.M. Best Co. has affirmed the financial strength rating of A
(Excellent) and the issuer credit ratings of “a” of Queen City
Assurance Inc. and Vine Court Assurance Inc. (both domiciled
in Burlington, VT). The outlook for both ratings is stable.
The ratings are based on Queen City Assurance Inc. and Vine Court
Assurance Inc.'s individual and combined profiles as single parent
captives of The Kroger Co. (parent). The ratings also are based on both
companies’ excellent risk-adjusted capitalization, substantial net
income and underwriting profitability, a growing capital base,
conservative investments and a strong adherence to the parent company’s
robust risk controls and its overall risk culture. Additionally, return
measures on a group and individual basis are consistently on positive
levels reflective of the organization’s prudent pricing and deployment
These significant strengths are partially offset by the companies' risk
concentration, which are the result of being single parent captives of
the parent company, coupled with a substantial aggregate limit retained
by the captives.
Key rating triggers that could result in a downgrading of the ratings
include a precipitous decline in the companies’ risk-adjusted capital
strength. Key rating triggers that could result in an upgrading of the
ratings include a consistently profitable operating performance coupled
with a substantial increase in risk-adjusted capitalization.
Either a rating enhancement or a deterioration in the capitalization of
the parent could result in either an upgrading or a downgrading of the
ratings of Queen City Assurance Inc. and Vine Court Assurance Inc.
A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated in the United States
and throughout the world.
For current Best’s Credit Ratings and independent data on the captive
and alternative insurance market, please visit www.ambest.com/captive.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Key criteria utilized include: “Risk
Management and the Rating Process for Insurance Companies”;
“Understanding BCAR for Property/Casualty Insurers”; “The Treatment of
Terrorism Risk in the Rating Evaluation”; “Evaluating Non-Insurance
Ultimate Parents”; and “Alternative Risk Transfer (ART).” Best’s Credit
Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
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