Press Release|Insurance

KBRA Affirms Rating for Loggerhead Reciprocal Interinsurance Exchange

9 Jan 2024   |   New York


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

The rating reflects Loggerhead's low underwriting leverage, favorable market opportunity, no legacy liabilities, and manageable start-up expenses due to its organizational structure. While underwriting leverage will increase as the business scales, Loggerhead’s surplus position compares favorably to the current level of premium writings. Loggerhead is one of a handful of recently launched companies that have entered a Florida personal residential homeowners’ sector characterized by advantageous market conditions with generally declining private carrier capacity. While still developing in response to market opportunities, KBRA views the company’s business plan as reasonable, with a management team that has considerable experience in the Florida homeowners’ insurance market. Balancing these strengths are the company’s high financial leverage, product and geographic concentration, exposure to event risk and reliance on reinsurance, and execution risk. Given Loggerhead’s surplus base consisted entirely of a $30 million surplus note at inception, financial leverage is high. Loggerhead is a single state carrier, and its revenues are comprised of primarily personal residential property premiums which exposes its earnings profile to potential volatility. Geographic and earnings concentration necessitates a dependence on reinsurance and exposes the company to event risk and the occurrence of natural catastrophes and severe weather events. Lastly, as a recently launched company, there is limited track record of financial results and favorable operations are dependent upon management executing its business plan.

Loggerhead Reciprocal Interinsurance Exchange, headquartered and domiciled in Florida, is a recently launched reciprocal exchange. Loggerhead is managed by Loggerhead Risk Management, LLC, (LRM) the attorney in fact. LRM receives a fee from the Exchange for underwriting and claims management, as well as all operational functions.

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: 1002964

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