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AM Best Revises Issuer Credit Outlook to Positive for Palms Insurance Company, Limited; Affirms Credit Ratings of Palms Specialty Group’s Members

NEE
  • AM Best revised the Long-Term Issuer Credit Rating outlook for Palms Insurance Company, Limited (Palms) from stable to positive while affirming its A Financial Strength Rating & "a" Long-Term ICR.
  • The Financial Strength Rating outlook for Palms remains stable.
  • AM Best affirmed the A- Financial Strength Rating & "a-" Long-Term ICR with a stable outlook for Palms Specialty Insurance Company, Inc. (Palms Specialty) & its affiliate Sabal Specialty Insurance Company, Inc.
  • Palms & Palms Specialty Group are collectively known as Palms Specialty Group, domiciled in Delaware, & wholly owned by NextEra Energy Capital Holdings, Inc., which is owned by NextEra Energy, Inc.
  • Palms operates as a single-parent captive for NextEra, underwriting property, casualty, workers' compensation, automobile liability, & employers' liability risks.
  • Palms Specialty, formed in 2022, focuses on U.S. excess & surplus lines accounts for specialty property, professional lines, & other specialty lines.
  • Palms holds the strongest balance sheet strength assessment supported by its highest risk-adjusted capitalization (BCAR) & five years of organic surplus growth.
  • Palms demonstrates adequate operating performance with five-year combined & operating ratios outperforming the AM Best captive composite.
  • Palms Specialty Group holds a very strong balance sheet strength assessment & adequate operating performance based on its favorable operating ratio since inception.
  • Palms Specialty Group has a limited business profile due to execution risks associated with growth & market competition.
  • Negative rating action for Palms Specialty Group could occur if its balance sheet strength or operating performance materially deviate from current expectations.
  • Both entities benefit from NextEra's established enterprise risk management framework & their roles within the parent's risk management structure.