AM Best has assigned a Preliminary Credit Assessment (PCA) to Vantage Risk Ltd. (Vantage) (Bermuda) with a Financial Strength Assessment of A- pca (Excellent) and a Long-Term Issuer Credit Assessment of “a-” pca. The outlook assigned to these PCAs is stable.
The PCAs reflect Vantage’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 (ERM).
The very strong balance sheet assessment is based on a preliminary financing structure that projects supportive risk-adjusted capital that meets AM Best’s guidelines for newly formed organizations. This incorporates supportive risk-adjusted capital levels through a five-year start-up period. AM Best assesses Vantage’s operating performance as adequate based on the clearly defined business plan that contemplates a level of implementation and execution risk for a newly formed entity.
AM Best views Vantage’s business profile as limited, given the execution risk associated with entering a highly competitive market, this risk is somewhat mitigated by the management team’s strong track record in the insurance and reinsurance industries. Furthermore, the business profile assessment reflects that, as new market entrants, the company will require a period to establish its brand and market position. A clearly defined ERM structure includes risk appetite and tolerance statements that focus on concerns specific with the business profile. The company’s risk management benefits from the depth and breadth of the procedures and policies designed by the experienced management team.