AM Best confirms the credit ratings of StarStone Insurance Bermuda Limited and its subsidiary

LONDON-(BUSINESS WIRE)–AM Best affirmed the financial stability rating of A- (Excellent) and the long-term issuer credit rating of ‘a-‘ (Excellent) of StarStone Insurance Bermuda Limited (SIBL) (Bermuda) and StarStone Insurance SE (SISE) (Liechtenstein). The outlook for these credit ratings (ratings) is stable.

SIBL’s ratings reflect the strength of its balance sheet, which AM Best rates as very strong, as well as its marginal operating results, limited business profile and adequate enterprise risk management (ERM). SISE’s ratings reflect the strength of its balance sheet, which AM Best rates as very strong, as well as its marginal operating performance, limited business profile and adequate ERM. Both companies’ ratings benefit from the support of their ultimate parent, Enstar Group Limited (Enstar), which has experience in providing financial assistance and operational support.

Both companies stopped generating new business in July 2020 and SIBL has since divested itself of its US subsidiaries. SIBL underwrites the liabilities of the businesses written before the release date by these companies through reinsurance arrangements. A wholly-owned subsidiary of SIBL also ceased its participation in Lloyd’s Syndicate 1301 at the end of 2020, but retained the business’ obligations underwritten in 2020 and previous Lloyd’s underwriting years.

SIBL’s and SISE’s balance sheet strength ratings are supported by risk-adjusted capitalization at the strongest level as measured by Best’s capital adequacy ratio (BCAR) at year-end 31 December 2021. AM Best expects risk-adjusted capitalization for both organizations to remain at their strongest in the medium term based on their runoff plans.

SIBL’s balance sheet strength is supported by a relatively conservative investment portfolio and significant reinsurance protection which includes loss portfolio transfer (LPT) underwritten by Enstar group entities. Although historical reserve volatility is an offsetting factor, the company demonstrated positive reserve development on a gross and net basis in 2020 and on a gross basis in 2021, where a portion of the positive development was ceded to Enstar Group affiliates via LPT. SISE’s balance sheet strength is supported by a conservative investment portfolio and low underwriting leverage due to high level of cessions to parent SIBL.

The companies’ marginal operating results reflect their poor historical performance. Their limited business profile estimates account for their significantly reduced scale as a result of corporate disposals and the decision to stop generating new business.

This press release refers to the credit ratings that are published on the AM Best website. For all rating information related to the release and related disclosures, including details of the agency responsible for issuing each of the individual ratings mentioned in this release, please see AM Best’s web page for recent rating activities. For further information on the use and limitations of credit score opinions, please see the Best Credit Score Guide. For information on the proper use of Best’s credit ratings, Best’s performance ratings, Best’s preliminary credit ratings, and AM Best’s press releases, please see the Guide to the Proper Use of Best’s Ratings and Ratings.

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.

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