Credit rating agency AM Best has assigned Florida Insurance and Reinsurance Company (Florida Re), a subsidiary of global independent reinsurance group MNK Group Holdings, a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent).
Meanwhile, London-based MNK Group has received a long-term ICR of “bbb-” (good), with a stable outlook on these ratings.
AM Best said Florida Re’s ratings reflected its “very strong” balance sheet strength, adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The ratings agency explained that as a start-up, the balance sheet strength assessment uses the five-year business plan communicated by management to consider current and future risk-adjusted capital.
Florida Re is capitalized through cash contributions from the ultimate business owners and currently has no outstanding debt.
The initial operating performance rating is also based on the company’s five-year business plan, which is dependent on successful implementation over the plan period. Florida Re’s business plan calls for a combination of insurance business conducted in the United States with reinsurance business assumed to be sourced from international markets.
The limited business profile takes into account that the Florida-based re/insurer is focused on domestic commercial properties, specifically condominium associations, while its reinsurance business will focus on assumed properties, among others. Florida Re expects to begin operations in late 2025 and will leverage partnerships with condominium associations in the insurance space and relationships with affiliates that manage general agents in the reinsurance space.
Given the nature of a start-up organization, Florida Re’s current appropriate enterprise risk management may change, which creates execution risks. Its controls and tolerances are already in place and will continue to evolve as the company expands, thereby developing enterprise risk management. AM Best emphasized that these ratings are dependent on Florida Re’s effective execution of its proposed business plan.
