AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to The Pie Insurance Company (TPIC) (Columbus, OH) and its pooled affiliate, Pie Casualty Insurance Company (PCIC) (Chicago, IL), collectively referred to as Pie Insurance Group (Pie). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Pie’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings consider Pie’s strongest level of projected risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and a sound business plan that leverages advanced technology in unique ways to transform how small businesses buy commercial insurance, with the goal of making it more affordable and easier to purchase. The company is building a geographically diversified book of business that is sourced through direct channels, independent agents and various partnerships. The company uses proprietary technology that leverages machine learning to rapidly segment, price and underwrite commercial insurance for small businesses. AM Best believes that the company’s relationships and distribution channels will be critical in gaining the projected scale in the market.
The ratings also consider the execution risk inherent in startup organizations and the potential challenges management faces to execute on the business plan. While the company’s innovative technology and relationships are anticipated to meet projections effectively, the scaling of operations and reinsurance dependence may present challenges in gaining traction and achieving the planned profitable results. As is customary, AM Best will closely monitor Pie’s actual results relative to its plan.
The parent was capitalized in part with Series D convertible perpetual preferred stock in September 2022, which is considered a hybrid security under AM Best’s guidelines and results in an elevated leverage ratio. However, the preferred stock contains no cash servicing or redemption obligations that might reduce the parent's access to this capital. This alleviates AM Best’s concerns related to leverage at the parent level.
Pie began writing business in 2018, offering workers’ compensation with a focus on small businesses. With the acquisition of PCIC in September 2021 and the subsequent acquisition of TPIC in January 2023, Pie has completed its transition to a direct writer from a managing general agent.
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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