AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Amherst Specialty Insurance Company (Amherst Specialty) (Addison, TX). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Amherst Specialty’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Amherst Specialty was founded in December 2023 as a Texas-domiciled surplus insurance carrier. It is classified under the Financial Size Category of VIII. The company is a subsidiary of the ultimate parent, RTC Financial Group, LLC (RTC), and received a Certificate of Authority to transact insurance business in the state on Dec. 15, 2023. RTC is also the parent of Risk Theory Holdings (Risk Theory). Risk Theory began underwriting in 2013 and has grown to nearly 250 employees offering multiple programs focused on the specialty market. Amherst Specialty will become the primary excess and surplus insurance paper to write all new and renewal policies of Risk Theory programs.

The balance sheet strength assessment is driven by AM Best’s expectation that Amherst Specialty will maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), over the five-year start-up period. Additionally, the balance sheet further reflects Amherst Specialty’s conservative investment strategy and overall liquidity profile. Partially offsetting these factors is the company’s limited financial flexibility on a stand-alone basis. However, Amherst Specialty’s risk-adjusted capitalization has been supported by credit facilities obtained by its ultimate parent, highlighting the overall financial strength of the organization.

AM Best assesses Amherst Specialty’s operating performance as adequate based on the company’s primary business programs, which have been in place at Risk Theory, an affiliated managing general agency platform, and are expected to generate positive results over Amherst Specialty’s business plan. AM Best assesses the company’s business profile as limited given the start-up nature of the company and strong competition in the surplus lines industry. However, management has extensive experience operating the primary business programs, which offsets some of the execution risk involved. AM Best assesses Amherst Specialty’s ERM capabilities as appropriate, supported by an ERM framework with clear identification of risks, tolerances, and reporting requirements. Additionally, management will utilize strong reinsurance programs to preserve the capital base adequately.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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