AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Riverfront Insurance, LLC (Riverfront) (Wilmington, DE). Concurrently, AM Best has withdrawn these Credit Ratings (ratings) as Riverfront has requested to no longer participate in AM Best’s interactive rating process.

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

Riverfront’s balance sheet strength is supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), but offset by a high annual aggregate retention level relative to surplus. The parent supports the company’s balance sheet with a net worth maintenance agreement to be used if necessary.

AM Best assesses Riverfront’s operating performance as adequate based on favorable metrics the company demonstrated over the past few years. Riverfront was created in response to hard market conditions for directors & officers and errors & omissions coverage from a parent with roots in the student loan industry. However, the elevated risk from that association has largely subsided and is also mitigated as Riverfront writes claims-made policies covering claims reported in the policy year of coverage (none to date). Riverfront’s ERM is integral to Navient Corporation from whence it originated to cover a portion of potential exposure subject to market pricing and conditions. Riverfront does not use reinsurance.

The negative outlooks reflect pressures on the company's risk-adjusted capitalization with the possibility of a significant decrease in shareholder equity.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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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