Genstar-backed Obsidian secures A- rating for new E&S carrier

Genstar-backed fronting insurance start-up Obsidian has secured A- financial strength rating for its new excess and surplus (E&S) lines carrier, Obsidian Specialty Insurance Company.

With the newly launched fronting insurance carrier Obsidian is targeting the hardening E&S market that is seeing an increase in overall MGA activity.

The insurer was capitalised with a $30 million cash contribution from Obsidian Insurance Holdings as well as the contribution of 100 percent of the capital stock of Obsidian Insurance Company.

Established in Delaware, the carrier is serving managing general agents, managing general underwriters, and programme managers.

The rating of Obsidian Specialty brings together Obsidian Insurance Company's rating with Obsidian Specialty on a pooled basis.

Both the Ohio and Delaware Departments of Insurance have approved the consolidated group entering into three inter-company agreements for administrative services, tax sharing, and pooled reinsurance.

AM Best said its ratings reflect the consolidated group's balance sheet strength, which it categorises as 'very strong', as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

William Jewett, chief executive officer of Obsidian, said: "Obsidian Specialty continues to build a truly differentiated hybrid programme carrier, and the addition of surplus lines capabilities represents a significant step in our development. It is important that Obsidian offer a full suite of capabilities and supporting services as we partner with best-in-class MGAs and programme managers."