AM Best Removes From Under Review with Developing Implications and Affirms Credit Ratings of StarStone Specialty Insurance Company and StarStone National Insurance Company
AM Best has removed from under review with developing implications and affirmed the Financial Strength Ratings of A- (Excellent) and the Long-Term Issuer Credit Ratings of "a-" of StarStone Specialty Insurance Company and StarStone National Insurance Company (collectively Core Specialty). The outlook assigned to these Credit Ratings (ratings) is stable. Both companies are domiciled in Wilmington, DE.
The ratings reflect Core Specialty's balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The removal from under review status follows the execution of the sale of Core Specialty to its new ultimate parent company, Core Specialty Insurance Holdings, Inc. While the previous owners have maintained their nominal dollar investments, new investors have been brought in, which has diluted the prior owner's stake to below a majority interest. The new owners include various investment funds with experience in industry sector start-ups and private investments.
The affirmation of the ratings reflects Core Specialty's recent recapitalization and revised business plan. The group has brought on new executive management, namely at the CEO and Executive Chairman positions, to expand into new lines of business. Additionally, part of the recapitalization included removing the legacy reserve liabilities from the group's balance sheet. As a result, the group benefits from a lack of legacy reserves, while still maintaining various seasoned businesslines. However, the group's expansion into new property lines, as well as adding new management, brings some level of execution risk, which AM Best will monitor in the near- to mid-term.
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 media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.
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