Transverse gets A- rating for E&S platform

Program fronting start-up Transverse Insurance Group (TIG) has secured an A- AM Best financial strength rating for its recently acquired E&S platform.

The agency has also assigned an “a-” long-term issuer credit rating to the unit, which is called Transverse Specialty Insurance Company, and affirmed the ratings of the parent.

As previously reported, Transverse bought Arrowood Surplus Lines Insurance Company (ASLIC) in a deal that closed in January as it builds out its operations in the US.

AM Best said the ratings reflect the group’s “very strong” balance sheet strength, along with its adequate operating performance, limited business profile as a start-up and appropriate enterprise risk management.

“AM Best assesses Transverse Insurance Group’s operating performance as adequate based on the group’s clearly defined business plan that contemplates a level of implementation and execution risk for a newly formed entity.

“AM Best views the group’s business profile as limited, as it will serve as a hybrid fronting/transformer carrier, and will require a period to establish its brand and market position,” explained the firm.

The renamed E&S subsidiary was previously owned by Arrowood Indemnity Company (AIC), a subsidiary of Arrowpoint Capital.

Delaware-domiciled ASLIC is authorised to write on a surplus lines basis in most states in the US.

The acquisition adds to Transverse’s admitted platform which was secured with the purchase of Financial American Property and Casualty Insurance Company, which is now writing as Transverse Insurance Company.

At the time the E&S acquisition was announced, TIG’s founding CEO Erik Matson said: “The addition of ASLIC to Transverse means we now have the ability to write business for both admitted and non-admitted programs.

“We have put in the hard work to build the ideal solution for sophisticated, innovative MGAs and program administrators – as well as a conservative and supportive partner for the global reinsurance market.

He added that Transverse will continue to build out its capabilities to allow it to meet the needs of programs in any line of business and geography.

TIG has an ambitious program strategy that includes its core US operations and the creation of a European platform.

The start-up has identified an opportunity to build a significant portfolio of specialty P&C program business in the US market from its relationships with MGAs, reinsurance brokers and reinsurers.

It typically retains up to 10 percent of the risk on programs it cedes to reinsurers and will offer transformer services for ILS transactions.