Press Release|Insurance

KBRA Affirms Rating for Loggerhead Reciprocal Interinsurance Exchange

17 Jun 2025   |   New York

Contacts

KBRA affirms the BBB Insurance Financial Strength Rating (IFSR) for Loggerhead Reciprocal Interinsurance Exchange (“Loggerhead” or “the Exchange”). The Outlook is Stable.

The rating reflects Loggerhead’s low underwriting leverage, strong liquidity, and meaningful capital formation through recurring subscriber surplus contributions. Loggerhead’s capital position more than doubled in 2024, supported by a $60 million surplus note issuance and $10.2 million in contributions, with policyholders’ surplus reaching $53.2 million at year-end. The Exchange also benefits from a 40% quota share reinsurance agreement, which improves capital efficiency and moderates acquisition cost strain. Loggerhead’s catastrophe reinsurance program provides protection up to a 1-in-155-year return period and also includes second event and reinstatement protection. The company continues to demonstrate underwriting discipline, favorable attritional loss performance, and deliberate geographic diversification within Florida. While the company remains in the early stages of its operating history, management’s experience, along with the use of advanced underwriting technology and measured growth, supports execution of its business plan.

Balancing these strengths are Loggerhead’s high financial leverage – surplus notes comprised 113% of year-end 2024 surplus – as well as concentrated exposure to the Florida personal residential property market. Loggerhead remains exposed to catastrophe risk, legal and regulatory volatility, and reliance on reinsurance availability and pricing. As a carrier with less than three full years of operations, the company’s earnings and capital formation remain sensitive to event losses, underwriting execution, and the performance of its in-force exposure. While capitalization is expected to improve, KBRA views execution risk and event risk as material credit considerations.

Loggerhead Reciprocal Interinsurance Exchange is a Florida-domiciled reciprocal insurer managed by Loggerhead Risk Management, LLC, its attorney-in-fact. The Exchange is governed under Florida’s reciprocal insurer statutes and has no shareholders. Loggerhead Holding Company, LLC, a non-operating parent, facilitates capital support through surplus notes and administrative oversight.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

Disclosures

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 www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1009890

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