Golden Bear upgraded to A by AM Best

Golden Bear has had its financial strength rating upgraded from A- to A by AM Best as the agency highlighted the US specialty insurer’s consistent profitability and outperformance of the commercial casualty segment over the last five years, and its ability to target opportunities in improving segments.

The Stockton, California-based insurer’s long-term issuer credit rating was also upgraded from “a-” to “a” with the outlook revised from positive to stable.

AM Best said the rating upgrades are the result of favourable trends in the company’s business profile, which sees it operate as a specialty insurer offering surplus lines coverage across the US and admitted coverage in California and Arizona.

“As a surplus lines writer, the company enters and exits markets as opportunities arise. The dynamic nature of the company’s product offerings has caused material changes in premium composition year over year and premium fluctuations over longer time frames,” said the agency.

But it added that Golden Bear’s management has a proven track record of being able to target specific markets in which it can gain meaningful market share.

The insurer has more than doubled its direct written premiums from $51.2mn in 2016 to $120.6mn in 2019 and wrote $68.8mn in the first half of 2020, suggesting further growth this year in an E&S market that has been buoyant despite the Covid-19 impact on the US economy.

According to its statutory results, its underwriting has been profitable through that period, with a combined ratio ranging from 82.7 percent to 97.5 percent. Last year the combined ratio came in at 95.5 percent.

The carrier has also delivered consistent operating profits since 2016. Last year it generated $6.2mn of operating profits and in H1 2020 had already delivered $5.3mn in operating profits.

AM Best said its ratings reflect Golden Bear’s “very strong” balance sheet strength, its strong operating performance, neutral business profile and appropriate enterprise risk management.

Golden Bear was founded by Michael J Hall in 1978 and is owned by wholesale broker MJ Hall & Company. The carrier is led by Rupert Hall as president.

It writes a range of commercial and personal lines, including commercial property, primary and excess casualty, cannabis P&C, lawyer liability, homeowners, renters, condominium owners and dwelling-fire.