KBRA Affirms Rating for Loggerhead Reciprocal Interinsurance Exchange
17 Jun 2025 | New York
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.
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