KBRA Affirms Rating for Loggerhead Reciprocal Interinsurance Exchange

KBRA affirms the BBB Insurance Financial Strength Rating (IFSR) for Loggerhead Reciprocal Interinsurance Exchange (“Loggerhead” or “the Exchange”). The Outlook is Stable.

The rating reflects Loggerhead’s adequate capitalization, low net underwriting leverage, favorable liquidity, improved underwriting performance, and recurring surplus formation through subscriber surplus contributions. The company’s capital position improved materially in 2025, liquidity remains favorable, and underwriting performance improved as catastrophe impact moderated, non-catastrophe loss performance strengthened, and risk selection remained disciplined. Loggerhead’s reciprocal structure provides a recurring source of surplus formation, which supports the potential for gradual moderation in surplus note leverage over time. The rating also considers the company’s catastrophe risk management, including a reinsurance program that provides meaningful protection relative to its modeled Florida property exposure.

Balancing these strengths are elevated financial leverage and capital quality constraints, including a meaningful proportion of surplus note capital. Additional constraints include concentration in Florida residential property insurance, exposure to hurricane and other severe weather event volatility, continued reliance on reinsurance availability, pricing, and collectability to manage catastrophe risk, and execution risk associated with Loggerhead’s limited operating history, ongoing growth objectives, evolving distribution platform, maturing risk management framework, and a more competitive Florida market.

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