AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Mereo Insurance Limited (Mereo) (Hamilton, Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Mereo’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).

The ratings also reflect AM Best’s expectation that, based on Mereo’s business plan, the company will continue to maintain a balance sheet strength assessment of very strong supported by its projected risk-adjusted capitalization being at the strongest level throughout the five-year initial forecast period, as measured by Best’s Capital Adequacy Ratio (BCAR). Initial capitalization in 2024 and retained earnings through the forecast period are expected to support Mereo’s premium and loss reserve growth.

The adequate operating performance and the limited business profile assessments are based on Mereo’s business plan as presented to AM Best and supported by the first year of operations. Outlined in the plan is a portfolio composed of property/casualty/specialty business diversified by subcategories, geographies and attachment points. Mereo’s senior management team is composed of individuals with extensive experience and a strong track record in the industry. Nevertheless, the limited business profile assessment considers the execution risk faced by any start-up operation, in recognition of the customary challenges associated with gaining market acceptance in the casualty/specialty space. An ERM structure has been established initially and is expected to develop as the complexity of the business evolves during the first few years of operations.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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