AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Independence American Insurance Company (IAIC) (Wilmington, DE). The outlooks assigned to these Credit Ratings (ratings) is stable.

The ratings reflect IAIC’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.

The ratings have been removed from under review with developing implications following IAIC’s renegotiation and re-implementation of its pet insurance quota share reinsurance contracts and an additional $125 million contribution from its parent, Independence Pet Holdings, Inc., both of which occurred in the third quarter of 2025.

The balance sheet strength assessment of very strong reflects IAIC’s investment portfolio, which is almost entirely investment grade and is split between bonds and cash and short-term investments. IAIC has ample sources of liquidity and has no debt within its financial structure. The company has demonstrated capital and surplus growth, with the trend continuing into the third quarter of 2025. IAIC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), was considered strong at year-end 2024. The decline in the company’s BCAR at year-end 2024 was due to the refiling of the 2024 annual statements to reflect deposit account on the reinsurance contracts effective Jan. 1, 2024. The company’s BCAR improved to the strongest level with the renegotiation and re-implementation of its pet insurance quota share reinsurance contracts and the $125 million of capital contributed in the third quarter of 2025. Additionally, the BCAR is projected to remain at the strongest level for 2025.

IAIC has grown premiums in each of the past five years, with substantial growth over that time, driven by  various acquisitions and organic growth. While net premiums were expected to decline at year-end 2024, its reinsurance contracts were switched to deposit accounting, resulting in a substantial increase in net premiums. Net premiums are expected to decline slightly in 2025 due to the re-implementation of reinsurance agreements effective July 1, 2025. IAIC’s operating earnings were positive in 2024 and through the third quarter of 2025, driven by efficiencies. Net income through the third quarter of 2025 was $44.3 million, driven by strong underwriting and investment gains.

While the company’s product is concentrated in pet health insurance, it diversifies by offering both individual and group coverage. The company is one of the largest pet insurance companies in the United States following various recent acquisitions and organic growth.

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