Press Release|Insurance

KBRA Downgrades Rating for Unique Insurance Company, Affirms Rating for Stonegate Insurance Company, and Removes Watch Downgrade Status from Both Companies

25 Apr 2024   |   New York


KBRA downgrades the Insurance Financial Strength Rating (IFSR) for Unique Insurance Company (UIC) to BBB- and affirms the BBB IFSR for Stonegate Insurance Company (SIC). The Watch Downgrade status on both companies has been removed and the Outlook is Stable for both ratings.

Key Credit Considerations

The downgrade of UIC reflects KBRA stress testing results which demonstrated an inadequate margin for maintaining a BBB rating level over the medium term. While UIC benefited from a revised surplus relief quota share agreement with its affiliate, Prospero Re Ltd. (A/Stable), and material 2023 rate increases, the company still required a significant capital contribution from its parent, Producer’s National Corporation (PNC) to emerge from regulatory action by the end of 2023.

The affirmation of SIC’s rating reflects stabilization of policyholders’ surplus and RBC (ACL), primarily from the benefit of the revised surplus relief quota share agreement noted above in conjunction with a minimal capital contribution from PNC in 2023. In addition to 2023 rate increases that had not yet fully earned through by the end of the year, SIC has ongoing simplification initiatives in progress. KBRA believes the company has adequate capital to withstand moderate deterioration in financial position at the current rating level while the benefits of the simplification initiatives flow through to the financial results.

Rating Sensitivities

Improved underwriting results, consistent reserving with negligible adverse development, implementation of a formal ERM program and improved risk-adjusted capitalization at UIC could result in positive rating action. Reduced support from Resolute Global Partners, further regulatory action at UIC, continued poor underwriting results, material adverse loss reserve development, deterioration in the quality of the investment portfolios and/or adverse change in risk profile could result in a negative rating action.

To access rating and relevant documents, click here.

Click here to view the report.



Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004046

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