AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Ardellis Insurance Ltd. (Ardellis) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
These ratings reflect Ardellis’ balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
Ardellis is a wholly owned subsidiary of UFP Industries, Inc., and provides reimbursement coverage for medical stop-loss, workers’ compensation, general liability, auto liability, auto physical damage, property and trade receivables to its parent. In addition, Ardellis assumes medical stop-loss exposure from third parties, which represents approximately half of the company’s premiums.
Ardellis’ balance sheet strength remains very strong, supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). On a five- and 10-year average basis, Ardellis’ combined and operating ratios have outperformed the general property/casualty industry driven by the company’s loss control, safety practices and low overhead. AM Best notes that 2022 earnings were impacted by a few large medical stop-loss claims, causing an uptick in the reported loss & loss adjustment expense (LAE) ratios. Despite the increase in the loss & LAE ratios, Ardellis achieved a net operating profit for the year.
AM Best considers Ardellis’ ERM framework and risk management capabilities appropriate for its risk profile. Furthermore, Ardellis benefits from being an integral part of its parent’s ERM framework.
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