|[March 12, 2014]
A.M. Best Assigns Ratings to COPIC, A Risk Retention Group
OLDWICK, N.J. --(Business Wire)--
A.M. Best has assigned a financial strength rating of A
(Excellent) and an issuer credit rating of "a" to COPIC, A Risk
Retention Group (COPIC RRG) (District of Columbia). The outlook
assigned to both ratings is stable.
COPIC RRG's ratings reflect its excellent risk-adjusted capitalization,
A.M. Best's expectation of modest favorable operating performance (being
a start-up company) and strong reinsurance protection. Its initial
capital was provided by its sponsor, COPIC Trust (Trust).
Significant reinsurance support is provided to COPIC RRG by COPIC
Insurance Company (COPIC), the lead company of COPIC Companies (a
diversified service organization dedicated to anticipating and meeting
the needs of Colorado's health care community), and a subsidiary of
These positive rating factors are partially offset by COPIC RRG's risk
of adverse losses from being a start-up company and expanding into new
states, the concentration risk of primarily writing one line of business
in a somewhat limited geographic area and the amount of initial capital
contributed that is somewhat low. The ratings further reflect the
limited permanency of capital as COPIC RRG's entire capital is in the
form of a 20-year surplus note. However, this is mitigated by the long
maturity of the note and the anticipated very low underwriting leverage
represented in COPIC RRG's business plan The company maintains a
conservative investment portfolio with minimal returns expected.
Therefore, underwriting performance will be the primary driver of
The outlook is based upon the organization's conservative pricing and
reserving practices and strong business position in its medical
professional liability insurance markets.
Positive rating actions could occur from COPIC RRG having a long-term
continuation of strong underwriting results, as well as careful
evaluation of enterprise risk management risks and opportunities with
appropriate actions taken to enhance the value of the company for its
insureds and owners.
The outlook for the ratings may be lowered if adverse underwriting
results develop from a loss of underwriting discipline, market
conditions put pressure on top-line growth and/or negative investment
outcomes affect surplus levels. Furthermore, negative rating actions may
occur should support from COPIC be diminished or interrupted.
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 risk transfer 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. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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