AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of Queen City Assurance, Inc. and Vine Court Assurance Incorporated, both domiciled in Burlington, VT, and collectively referred to as Queen City Assurance Group. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The group’s level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level. In addition, the group consistently maintains strong liquidity measures while adhering to a conservative investment philosophy. The ratings also consider the financial flexibility afforded to the companies via their publicly traded parent, The Kroger Co. (Kroger), one of the largest companies in the food retail industry.

The strong operating performance reflects the group’s favorable five- and 10-year average combined and operating ratios, as well as excellent return on revenue metrics. AM Best notes that the group’s return on equity measures appear lower relative to the broader industry, but this is consistent with its conservative underwriting leverage and purpose as a group of single parent captives, by which maximizing profitability is not the primary objective. While underwriting results weakened in 2024, due to an uncharacteristically high level of property losses, overall earnings remained positive, underpinned by solid investment income. Management has indicated that this level of loss activity does not represent a continuing trend. AM Best recognizes the group as an integral part in Kroger’s overall ERM framework, with financial resources and support available to them as single-parent captives providing tailored insurance coverage for property/casualty risks.

The stable outlooks reflect AM Best’s expectations that the captives’ operating performances will remain stable and strong, while the earnings profile continues to support the group’s growth and business writing consistent with their capital and surplus positions. AM Best also expects the parent’s ability and willingness to support the captives will not change.

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.

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