KBRA Affirms Ratings for WT Holdings, Inc. and Insurance Subsidiaries; Revises Outlook to Stable for WT Holdings, Inc., Stillwater Insurance Company and Stillwater Property & Casualty Company
21 Aug 2025 | New York
KBRA affirms the BBB+ insurance financial strength ratings (IFSRs) for Stillwater Insurance Company and Stillwater Property and Casualty Insurance Company (collectively referred to as Stillwater). The issuer and debt ratings for WT Holdings, Inc. have also been affirmed at BB+. The Outlook for these ratings has been changed to Stable from Negative. KBRA also affirms the A- IFSR for Evergreen National Indemnity Company. The outlook is Stable.
The change in Outlook from Negative to Stable for the Stillwater companies, WT Holdings, Inc. and its $60 million 7-year notes reflects improved underwriting performance and KBRA’s expectation that the companies will maintain adequate risk adjusted capitalization and that financial results will continue to improve in line with the company’s business plan. Additionally, it is KBRA’s expectation that the company will maintain its robust reinsurance programs and diversified investment portfolio which has consistently delivered strong net investment gains. Further, KBRA expects that management will continue to exercise prudent capital management and that financial leverage and interest coverage metrics will continue to improve in line with company projections.
The Stable Outlook for Evergreen reflects KBRA’s expectation that Evergreen will continue to maintain its very strong risk-adjusted capitalization, maintain solid operating results and management will continue to be prudent with respect to overall capital management.
The ratings for SIC and SPAC reflect their consistent net investment income and improved asset risk profile, broad and diversified distribution platform, experienced management team and improved underwriting results. Investment earnings have helped generate net income in three of the last five years and a material proportion of invested assets have shifted from unaffiliated stocks and schedule BA assets into lower risk fixed income securities. Business is generated using a multiple distribution platform, including relationships with over 3,500 independent agencies and several national partners. While underwriting results remain negative, the trajectory is positive over recent periods with accident year attritional losses improving to approximately 34% for the first half of 2025.
These positives are somewhat offset by the company’s exposure to natural catastrophes – wind (hurricane, tornado, and hail), wildfires and earthquakes. Cat losses in 2025 were driven by the Eaton and Palisades California wildfires in January (gross losses of $105.6 million). Auto results continued their unfavorable trend in 2024, driven by inflation impacts and supply chain and labor shortages impacting the ability and time required to repair vehicles. The company continues to take substantial rate increases and implement segmentation to improve results.
Evergreen’s rating reflects its low underwriting leverage, favorable long-term underwriting results and experienced management team in its niche surety business, which focuses on waste sector landfill closure and post-closure bonds. Through prudent underwriting and risk management, Evergreen’s underwriting performance is highlighted by low loss ratios, reporting a five-year average combined ratio of approximately 86%.
These positive rating factors are somewhat constrained by the company’s product concentration in the waste/landfill sector for surety, necessitating a strong reliance on reinsurance. However, this constraint is partially offset by the credit quality and length of relationships with its reinsurance partners, its broad geographic distribution and niche market expertise. Additionally, Evergreen’s investment portfolio is somewhat aggressive with a high proportion of equities and below investment grade bonds. Finally, because of the highly specialized business, key person risk exists with its top executives.
For the Stillwater companies, improved operating profitability and organic surplus growth, a meaningful sustained improvement in auto results, a favorable change in risk profile, or a favorable change in financial leverage and interest coverage at the holding company could result in a positive rating action. Failure to meet financial projections provided to KBRA, further deterioration in earnings, an unfavorable change in risk profile, sustained material adverse loss reserve development, the loss of available and appropriate amount of reinsurance, or an unfavorable change in financial leverage and interest coverage at the holding company could result in a negative rating action.
For Evergreen, improved profitability and surplus growth or a favorable change in risk profile could result in a positive rating action. Significant earnings deterioration, an adverse change in risk profile, loss of key clients, or material investment losses could result in a negative rating action.
WT Holdings, Inc. is a holding company organized under the laws of Tennessee and the ultimate owner of SIC, SPAC and Evergreen. SIC and SPAC are multiple line property and casualty insurers, authorized to write homeowners, commercial lines, auto and other personal lines of insurance through independent agents in all 50 states, and the District of Columbia. Evergreen is an Ohio-domiciled property and casualty company that focuses operations on specialty surety programs, including landfill closure and post closure bonds, apartment lease bonds, lease damage undertaking bonds, waste hauling bonds, and contract surety bonds across most of the United States.
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