OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Sustainable Assurance Company (SAC) (South Burlington, VT). The company is a wholly owned captive subsidiary of Lancaster County Solid Waste Management Authority (LCSWMA) (Lancaster, PA). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect SAC’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The stable outlooks reflect AM Best’s expectation that SAC’s balance sheet strength assessment is sustainable with supportive risk-based capitalization; that the captive will continue to generate strong operating performance from results in the near to intermediate term; and that there will not be any change in AM Best’s perception of the ability and willingness of SAC’s parent, LCSWMA, to support it.
SAC’s strong balance sheet assessment reflects the company’s very strong risk-based capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s surplus is somewhat small and, therefore, has a high retention to surplus ratio, challenging its capital adequacy in stressed scenarios. That said, the company has high quality capital, a conservative investment portfolio, history of minimal claims, and, ultimately, explicit and implicit support from its parent, for whom it was founded in 2021. The parent company has a long history of successful ERM practices, from which the captive structure emanated, in part as a strategic alternative to the more volatile commercial insurance market. Although the captive is a relatively new legal entity, the parent has favorable legacy experience in the offered coverage lines prior to forming SAC, reflecting prospectively low combined ratios and strong underwriting results. The captive projects underwriting modest profitability in each of the next five years, driven primarily by underwriting performance, supplemented by modest net investment income. Prospectively, SAC plans to grow capital and surplus through internally generated capital from profitable underwriting and overall operations. No dividends are planned.
AM Best assesses SAC’s business profile as limited due to its structure as a single-parent captive of LCSWMA. LCSWMA, a municipal authority incorporated in Pennsylvania in 1954, is recognized nationally for its leadership in the solid waste management sector. This concentration results in a relatively narrow product portfolio, with a focus on property and terrorism coverage, and a geographic concentration of exposures primarily in central Pennsylvania.
Positive rating action could occur if SAC’s balance sheet strength assessment improves, driven through its ability to grow surplus organically from profitable operations in line with management’s projections. Conversely, negative rating action could occur if the company’s balance sheet assessment weakens, reflecting higher severity losses than expected or a more aggressive stance in capital management. Negative rating action could occur if AM Best’s perception of the parent’s ability and willingness to support the captive weakens.
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.
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.
Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Contacts
Nasheeta Mahbub
Financial Analyst
+1 908 882 2468
[email protected]
Daniel Teclaw
Director
+1 908 882 2390
[email protected]
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
[email protected]
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
[email protected]
