The credit ratings of three companies operating under the Accredited banner remain under review with negative implications, AM Best has reported.

The ratings agency said that applies to the “A-” financial strength ratings and the “a-” long-term issuer credit ratings of Accredited Specialty Insurance Company of Phoenix, Orlando-based Accredited Surety and Casualty Company, and Accredited Insurance (Europe) Limited of Malta.

Concurrently, AM Best said, it has downgraded the long-term ICR to “bb” from “bbb-” of Bermuda-based R&Q Insurance Holdings, the non-operating holding company of the overall R&Q group.

The three Accredited members are wholly owned subsidiaries of R&Q.

AM Best added that it has withdrawn this long-term ICR as R&Q has requested to no longer participate in the agency’s interactive rating process.

At the time of the withdrawal, AM Best said, this rating was under review with negative implications.

The agency said: “The rating of R&Q reflected its status as the ultimate non-operating holding company of the group, and was notched down from AM Best’s assessment of the lead rating unit, which represents the consolidated R&Q group.

“The downgrade of R&Q’s rating follows it reporting an IFRS loss of $297 million for 2022, resulting in a decline in its reported capital and surplus by over 50 per cent at year-end 2022.

“The assessment considers subsequent actions taken by management to strengthen the R&Q group’s balance sheet, along with expected improvements that are likely following the planned divestment of the Accredited sub-group.”

AM Best added: “Accredited is assessed as a separate non-lead rating unit of the R&Q group. The ratings reflect Accredited’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.

“In addition, the ratings reflect a neutral impact from the sub-group’s ownership by R&Q. Despite pressure on R&Q’s rating fundamentals, AM Best considers Accredited’s balance sheet to be somewhat insulated over the near term.”

The agency said the ratings of Accredited will remain under review until AM Best has sufficient clarity over the rating fundamentals of the entities, subsequent to the sale of Accredited.

It added that the negative implications reflect execution risk related to Accredited’s planned divestment.

The failure of R&Q to effectively dispose of Accredited, AM Best said, would likely result in negative rating pressure for Accredited.