KBRA Affirms Rating for Trident Reciprocal Exchange
29 Aug 2025 | New York
KBRA affirms the BBB Insurance Financial Strength Rating (IFSR) to Trident Reciprocal Exchange. The Outlook for the rating is Stable.
Key Credit Considerations
Trident Reciprocal Exchange (“Trident” or “the Reciprocal”) is a de novo reciprocal exchange recently established to write homeowners’ insurance in Florida.
The rating reflects Trident’s low underwriting leverage and significant surplus relative to projected premiums written. The rating also reflects the company’s conservative and high-quality investment portfolio and a favorable market opportunity with Trident growing in a market with improved pricing and lower litigation exposure following legislative reforms in recent years. Additionally, as a recently formed insurer, Trident has no legacy liabilities and has generated net income year-to-date in 2025. Further, KBRA views the Reciprocal’s business plan as reasonable, with a management team that has considerable experience in the Florida homeowners’ insurance market.
Balancing these strengths is Trident’s high financial leverage due to its entire surplus base consisting of a $27 million surplus note. Trident is still in the process of building out its staff and is exposed to key person risk. Furthermore, as a Florida homeowners’ writer, the Reciprocal will have product and geographic concentration, natural catastrophe exposure due to hurricanes, and a high reliance on reinsurance that, depending on availability and affordability, could materially impact results. Lastly, as a de novo insurer, Trident’s future profitability is uncertain and dependent upon management executing its business plan.
Rating Sensitivities
Execution of the business plan above forecasts provided to KBRA, including organic surplus growth that reduces financial leverage faster than expected, improved financial flexibility and a favorable change in risk profile could result in positive rating action.
Results materially below forecasts provided to KBRA, significant weather events that materially impact earnings and capital, an inability to obtain reinsurance on acceptable terms and pricing, an unfavorable change in risk profile and/or departure of key members of the management without the ability to build out operational infrastructure could result in negative rating action.
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