AM Best has assigned a Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Ratings of “a-” (Excellent) to Falcon Indemnity Company, Inc., Galaxy Indemnity Company, Inc., and Golden Eagle Insurance Company, Inc. The outlook assigned to these Credit Ratings (ratings) is stable. The above-mentioned companies are collectively known as the Falcon Insurance Group (Falcon) and are domiciled in South Jordan, UT.

The ratings reflect Falcon’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).

Falcon’s strong balance sheet strength assessment is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) model, including adequate reserves, partially offset by its high combined retention relative to surplus. Also, Falcon’s investment portfolio has a high allocation and concentration in equities, which are diversified, but still could introduce surplus volatility in frothy markets.

Falcon’s strong operating performance assessment reflects its underwriting profitability over the last decade, driving metrics that compare favorably with its peers. AM Best expects Falcon’s operating trends will remain favorable.

The group’s business profile is assessed as limited. It consists of three side-by-side ‘captives’ that equally share business under a joint underwriting agreement. It writes coverage for only one entity, which is affiliated by partial common ownership. The entity, Reliable Properties, Inc. (Reliable), is a property manager with most of its exposure in southern California. The companies were established to provide direct coverage for Reliable and cover gaps that are conventionally insurable.

Falcon's ERM framework is appropriate for the size and complexity of its operations. The group has an informal ERM program that is evolving. Key risks have been identified and the group has risk controls and monitoring in place. The group’s loss levels are historically low and offers limits across its menu of 12 coverages for low frequency, high severity risks.

The stable outlooks reflect AM Best's expectation that Falcon will maintain its strong balance sheet strength assessment, supported by organic surplus growth from consistent underwriting profitability.

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.

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