KBRA Affirms Rating for Trident Reciprocal Exchange
27 Aug 2026 | New York
KBRA affirms the BBB Insurance Financial Strength Rating (IFSR) to Trident Reciprocal Exchange. The Outlook for the rating is Stable.
Key Credit Considerations
Trident Reciprocal Exchange (“Trident” or “the Reciprocal”) is a recently established reciprocal exchange that writes primarily homeowners’ and commercial residential property insurance in Florida.
The rating reflects Trident’s low underwriting leverage and adequate reinsurance program, including increased use of quota share reinsurance to manage risk-adjusted capital as the company grows. The rating also reflects the Reciprocal’s conservative, high-quality investment portfolio, which has no below investment grade fixed income or equity exposure and had an average credit quality of AA- as of 2Q26. Additionally, as a recently formed insurer, Trident has no legacy reserve liabilities related to prior catastrophe events or All Other Perils claims. KBRA also views Trident’s management team as experienced in the Florida property insurance market and believes the company has made progress building its operating infrastructure and distribution network.
Balancing these strengths is Trident’s high financial leverage, with $32 million of surplus notes outstanding representing approximately 114% of policyholders’ surplus as of 2Q26. Trident also remains exposed to key person risk given its relatively small staff. Furthermore, the Reciprocal has significant product and geographic concentration as a Florida property writer, resulting in material natural catastrophe exposure and a high reliance on reinsurance, including both quota share and excess of loss coverage. Reinsurance availability and affordability could materially impact Trident’s earnings, capital position, and ability to grow. Although legislative reforms have improved profitability in the Florida property insurance market through lower litigation costs, these improvements have also attracted additional private market capacity and contributed to increased competition and lower premium rates. Accordingly, Trident’s future profitability is dependent upon management successfully executing its business plan while maintaining appropriate capitalization and underwriting discipline.
Rating Sensitivities
Execution of the business plan above forecasts provided to KBRA, including organic surplus growth that reduces financial leverage faster than expected, improved financial flexibility and a favorable change in risk profile could result in positive rating action.
Results materially below forecasts provided to KBRA, significant weather events that materially impact earnings and capital, an unfavorable change in risk profile, an inability to obtain reinsurance on acceptable terms and pricing and/or departure of key members of the management without the ability to build out operational infrastructure could result in negative rating action.
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