KBRA Affirms Rating for Orange Insurance Exchange
13 Nov 2025 | New York
KBRA affirms the BBB insurance financial strength rating for Orange Insurance Exchange ("Orange" or "the Reciprocal"). The Outlook is Stable.
Key Credit Considerations
The rating reflects the company's management team which is well experienced in underwriting Florida's high-risk catastrophe market. Orange maintains a conservative, liquid investment portfolio consisting of publicly-traded investment grade bonds and cash and cash equivalents. Orange has a well-established and diversified distribution network consisting of 3,000 active independent agents and several large agencies. Additionally, as a recent entrant to the Florida homeowners' market, Orange has no legacy liabilities related to catastrophes or other weather events pre-2024. All its written business benefits from the favorable legislative changes enacted in 2022 and 2023.
Balancing these strengths is the Reciprocal’s high financial leverage due to the majority of its surplus base currently consisting of $27 million in surplus notes. Furthermore, as a Florida homeowners’ writer, Orange has product and geographic concentration, natural catastrophe exposure due to hurricanes, and high reinsurance dependence that, depending on availability and affordability, could materially impact results. While there are additional hires planned, Orange only has two active employees which presents key person risk. Lastly, Orange’s future profitability is uncertain and dependent upon management executing its business plan.
Rating Sensitivities
Factors that could lead to an upgrade include execution of the Reciprocal's business plan above management projections provided to KBRA, significant and sustained organic surplus growth, improved financial flexibility and access to capital, a favorable change in risk profile, and reduced financial leverage.
Factors that could lead to a downgrade include execution of the Reciprocal's business plan below projections provided to KBRA, significant weather events that materially impact earnings and capital, an inability to obtain reinsurance on acceptable terms and pricing, causing an increase in loss exposure, a reduction in the Orange’s ability to underwrite policies or a drag on earnings, an unfavorable change in risk profile, and the departure of key members of the management team without suitable replacement.
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