One Alliance Insurance Corporation's credit rating upgraded amid performance improvements
- AM Best has upgraded One Alliance Insurance Corporation’s Financial Strength Rating and Long-Term Issuer Credit Rating.
- The upgrades are due to improvements in One Alliance's operating performance and favorable market conditions.
- The positive outlook indicates ongoing commitment from management to enhance risk management and financial stability.
In San Juan, Puerto Rico, on May 8, 2025, AM Best upgraded One Alliance Insurance Corporation's Financial Strength Rating to B+ from B and the Long-Term Issuer Credit Rating to 'bbb-' from 'bb+'. The ratings now reflect a positive outlook, attributed largely to improvements in the company’s operating performance. Management initiatives aimed at scaling operations while maintaining a conservative reinsurance program have contributed to this upward adjustment in ratings. The upgrades follow a period of favorable operating earnings, and a five-year average return on equity that has outperformed AM Best's commercial property composite. The recent upgrade highlights One Alliance's balance sheet strength, assessed as adequate, despite its limited business profile and marginal enterprise risk management. The company reported significant growth in premiums alongside favorable operating earnings which have stabilized profitability in recent periods. Contributing to this positive development was the mild weather Puerto Rico experienced, which further supported the company's operational results. AM Best indicated that the management's dedication to improving risk management capabilities and enhancing exposure to risk selection is crucial to maintaining the positive outlook on the ratings. One Alliance has implemented strategies to improve overall profitability and manage risks effectively, utilizing catastrophic reinsurance protection above its modeled return period of 250, mitigating some exposure but still facing challenges from significant tail risk indicated by Best's Capital Adequacy Ratio at the 99.8% Value at Risk. Given these factors, the positive outlook and ratings reinforce One Alliance's ongoing improvement trajectory, and illustrate a commitment to strategically navigate the complexities of the insurance market and potential future challenges. The press release serves as a significant marker of One Alliance's growth and operational resilience within the competitive insurance landscape.