KBRA assigns a BBB+ Insurance Financial Strength Rating (IFSR) to Safepoint Insurance Company and a BBB IFSR to Cajun Underwriters Reciprocal Exchange. The Outlook for all ratings is Stable.

Safepoint Insurance Company is a Florida domiciled property and casualty insurance company headquartered in Temple Terrace, FL which writes primarily homeowners multi-peril business and allied lines in coastal regions in Florida, Louisiana, and Texas. Cajun Underwriters Reciprocal Exchange is a Louisiana domiciled property and casualty insurance company headquartered in Metairie, LA which writes primarily homeowners multi-peril and allied lines solely in Louisiana.

Key Credit Considerations

Positively impacting the ratings are the companies' conservative reserving practices, adequate risk-based capitalization, experienced management team and conservative investment portfolio. Negatively impacting the ratings are exposure to event risk, heavy reliance on reinsurance, and geographic and product concentration.

Rating Sensitivities

The following could result in a ratings upgrade: consistent net underwriting gains contributing to organic surplus growth, sustained improvement in ceded reinsurance leverage, Safepoint Insurance Company's profitable expansion to Louisiana and other states outside of Florida to better diversify earnings, favorable change in risk profile, or reduced financial leverage at Cajun Underwriters Reciprocal Exchange. The following could result in a ratings downgrade: deterioration in risk-adjusted capitalization and underwriting leverage, natural catastrophe events negatively impacting the balance sheet, an inability to obtain reinsurance on acceptable terms and pricing causing an increase in loss exposure, a reduction in the ability to write policies, or a drag on earnings, an unfavorable change in risk profile, or sustained material adverse development.

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Methodologies

Insurance: Insurer & Insurance Holding Company Global Rating Methodology

ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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