AM Best expects Vantage’s 2024 combined ratio to “track close to breakeven”

By Michael Loney

Feb 28 - (The Insurer) - Vantage Risk in the past two years has achieved operating profitability while its combined ratio is expected to improve to near breakeven for 2024, AM Best has commented while affirming the Bermudian (re)insurer’s A- (Excellent) rating.

AM Best also affirmed Vantage’s long-term issuer credit ratings of “a-” (Excellent).

All ratings apply to Bermuda-based Vantage Risk Ltd and its Wilmington, Delaware-based affiliates Vantage Risk Specialty Insurance Company and Vantage Risk Assurance Company, and have stable outlooks.

The rating affirmations follow an active initial four years of operations for the Greg Hendrick-led group, AM Best, noted.

“In the first two years, underwriting income was impacted adversely by elevated catastrophe losses; however, as Vantage Group has continued to grow to scale in 2023 and 2024 and moved property catastrophe business off its balance sheet through its insurance-linked securities vehicle, AdVantage Retro I Ltd, its underwriting results have improved,” it said.

Vantage’s strategy is expected to provide the group with accretive income while continuing to reduce volatility in its operating results in future years, AM Best said.

“Over the past two years, the group has achieved operating profitability though the group has yet to achieve a full-year combined ratio below 100. AM Best expects full-year combined ratios for 2024 to continue to benefit from these changes and track close to breakeven,” it continued.

Vantage continues to expand its primary insurance operations, the rating agency continued, noting a slow start in 2021 due to various operational challenges.

The company had initially hired industry veteran Jack Kuhn as the CEO of its insurance business but he departed to set up Westfield Specialty after only eight months. Former Axa XL executive Alex Blanco was appointed to the role in November 2021.

“As the group continues to execute its business plans, the reinsurance portfolio has become relatively smaller than the primary portfolio; and thus, has less of an impact to its bottom line,” AM Best said.

Vantage’s diversification and capabilities have expanded significantly since launch, although AM Best highlighted that some level of operational risks remains as new business seasons.

“AM Best will continue to monitor the group’s progression as it enters its fifth year of operation. AM Best anticipates that Vantage Group’s operating performance will continue to improve as its business plan is executed,” it said.