KBRA assigns a BBB Insurance Financial Strength Rating (IFSR) to Star Vantage Reciprocal Exchange. The Outlook for the rating is Stable.

Star Vantage Reciprocal Exchange ("Star Vantage") is a new Mississippi domestic reciprocal property and casualty insurance company headquartered in New Port Richey, FL which will write personal lines and commercial lines business on an admitted basis in Mississippi and on a surplus lines basis in other states. The rating reflects Star Vantage's low underwriting leverage and significant surplus relative to projected premiums written. The rating also reflects a favorable market opportunity due to the company entering a market with (until recently) declining private market capacity. The management team has solid industry experience and expects to write highly customizable policies which it views as a competitive advantage. Additionally, as a start-up insurer, Star Vantage has no legacy liabilities. Star Vantage will have minimal start up expenses due to an organizational structure whereby the Attorney-in-Fact (AIF) will incur the majority of start-up costs. Balancing these strengths is the company's high financial leverage due to 91% of its surplus base consisting of a $15.5 million surplus note. Furthermore, as a property writer in the Southeast, the company will have product and geographic concentration, natural catastrophe exposure due to hurricanes and high reinsurance dependence that, depending on availability and affordability, could materially impact results. Lastly, as a de novo insurer, Star Vantage's future profitability is uncertain and dependent upon management executing its business plan.

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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.

Doc ID: 1004878

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