AM Best has assigned a financial strength rating of “A-“ (Excellent) and an issuer credit rating of "a-" to Ironshore.
Concurrently, AM Best has assigned an ICR of "bbb-" to Ironshore's holding company, Ironshore Inc. The outlook for all ratings is stable.
Ironshore will operate as a Bermuda-based insurance company focused on broker sourced commercial property coverage located throughout the world, with its initial emphasis in the Gulf region of the United States.
The assigned ratings reflect Ironshore's solid capitalisation, conservative business plan and an experienced and highly regarded management team. In addition to meeting AM Best's previously established requirements for new company formations, the assigned ratings also reflect Ironshore's ability to meet AM Best's stricter risk-based capital requirements for property catastrophe companies.
However, in addition to being susceptible to low frequency high severity events, AM Best anticipates that Ironshore will be challenged by increased competition from both established excess and surplus companies and possibly from recent start-ups entering its targeted markets as a result of the recent Florida insurance legislation.
The additional capacity brought to the market could dampen expected returns if pricing of insurance coverage fails to meet anticipated levels. Furthermore, the ability of Ironshore to effectively build and retain market acceptance will only be proven over time.