KBRA Affirms Rating for Olympus Insurance Company
11 Dec 2024 | New York
KBRA affirms the BBB+ insurance financial strength rating for Olympus Insurance Company ("Olympus"). The Outlook is Stable.
The rating reflects Olympus's sound profitability and robust risk-adjusted capitalization, supported by significant surplus growth and an RBC ratio of 607% at year-end 2023. Olympus benefits from financial flexibility through its managing general agent and holding company structure, a conservative investment portfolio, and a well-established agent network focused on disciplined underwriting growth.
Olympus maintains a comprehensive reinsurance program with high-quality counterparties and manageable retentions, effectively mitigating catastrophe risks in Florida’s challenging market though somewhat offset by rising total insured values. Favorable underwriting results have been driven by exposure management, rate increases, and claims process optimizations, resulting in significantly reduced claim frequency and improved attritional losses.
Balancing these strengths is Olympus’s significant exposure to event risk, primarily from hurricanes, which heightens underwriting volatility and pressures surplus in the event of multiple natural catastrophes and severe weather events. Additionally, the company’s geographic and earnings concentration as a single-state insurer focused solely on Florida increases reliance on reinsurance affordability and availability, exposing its earnings profile to potential instability. While gross premium leverage is moderately unfavorable compared to benchmarks, it aligns with management’s targets and is mitigated by low net premium leverage and a well-structured reinsurance program.
Headquartered in Florida, Olympus focuses on homeowners’ insurance and related coverages within the state. Its strategy targets newer, higher-value homes and financially responsible customers. The company is a wholly owned subsidiary of Gemini Financial Holdings Corporation.
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