AM Best Places Credit Ratings of Capacity Insurance Company Under Review With Developing Implications
AM Best has placed under review with developing implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of "bbb-" (Good) of Capacity Insurance Company (Capacity) (Sunrise, FL).
Capacity's Credit Ratings (ratings) were placed under review with developing implications following the recent announcement that Team Focus Insurance Group, LLC (Team Focus), the holding company for Capacity, and PEAK6 InsurTech (PEAK6) have entered into a definitive purchase agreement where PEAK6 will be purchasing the majority of Team Focus. As part of the transaction, the restructuring will include a capital infusion to strengthen the insurance operation and facilitate future growth. Continued volatility in Capacity's operating performance has reduced the insurance entity's risk-adjusted capitalization and driven elevated pressure from the holding company whose impact is considered within Capacity's overall balance sheet strength. Historically, the holding company's impact has been considered neutral, and AM Best expects capital contributions to offset recent deterioration. The ratings will remain under review until management finalizes and executes these plans, all customary regulatory approvals are received and AM Best evaluates the impact on the organization.
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