KBRA Affirms Ratings for Tower Hill Group; Changes Outlook for Tower Hill Prime Insurance Company to Stable
12 Jun 2026 | New York
KBRA affirms the A- insurance financial strength rating (IFSR) for Tower Hill Prime Insurance Company (THP), the BBB+ IFSR for Tower Hill Insurance Exchange (THIE), and the BB+ long term credit rating (LTCR) for the $295 Million Senior Surplus Notes issued by THIE. The Outlook for THP has been changed to Stable from Negative. The Outlooks for all other ratings are Stable.
The change in the Outlook to Stable from Negative for THP reflects the significant improvement in the company’s underwriting and overall results in the last two years and management projections for this trend to continue for the medium term. THP’s risk profile has changed materially over the last two years as the negative results reported by the company prior to 2024 were largely driven by adverse underwriting results in its Florida business. With the establishment of THIE, all Florida personal lines business was transferred out of THP by August of 2023. The company’s current core strategy of writing personal lines business focused on nine southern and southeastern states and commercial E&S business via 50% quota share with Vantage Risk Specialty Insurance Company has generated significantly improved results in 2024 and 2025.
The ratings reflect the strong catastrophe reinsurance programs, strong and adequate risk adjusted capitalization metrics for THIE and THP respectively, improving surplus note leverage, conservative investment portfolio, experienced management team, and improving underwriting performance. Moreover, the companies’ distribution relationships are broad and well-established, including affiliates of well-recognized national direct writers as well as online agencies.
Balancing these strengths are the companies’ exposure to natural catastrophes given their geographic footprints and reinsurance dependence. THIE writes 100% of its premiums in Florida, a state highly exposed to hurricanes and other storm activity. While THP no longer writes Florida personal lines business, it still has some Florida exposure in its commercial lines book. Additionally, THP’s exposure to severe convective storms and hurricanes is still significant given its Texas and Southeastern state focus. KBRA views the catastrophe reinsurance programs as important mitigants to these risks. The companies’ dependence on reinsurance could have an adverse impact on results if availability and affordability of reinsurance were to become an issue.
Factors that could positively impact the rating include sustained operating profitability, a consistent positive trend in organic surplus growth, consistent outperformance of the business plan and management projections provided to KBRA, or a favorable change in risk profile. Factors that could negatively impact the rating include consistent underperformance of the business plan and management projections provided to KBRA, an inability to obtain reinsurance on acceptable terms and pricing, causing an increase in loss exposure, a reduction in the company’s ability to underwrite policies or a drag on earnings, departure of key members of the management team without suitable replacement, or an unfavorable change in risk profile.
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