A.M Best said Wednesday it had downgraded the financial strength rating of Cadence Indemnity, a Texas-domiciled captive insurer, to B- from B++.
Cadence’s public ratings have been withdrawn at the company’s request, a Best statement said. The Oldwick, New Jersey-based rating agency first rated the captive last year.
Cadence is the single-parent captive insurer of Sullivan Brothers, a conglomerate with units operating in construction, energy and health care, that has operated since 2023.
The ratings downgrades reflect Cadence’s weakening balance sheet strength, driven by a significant decline in risk-adjusted capitalization, Best said.
“In the latter half of 2025, Cadence experienced premium growth that substantially deviated from the business plans originally shared with A.M. Best,” it said.
Consequently, the captive’s underwriting risk “materially increased,” Best said.
Sullivan Brothers did not immediately respond to a request for comment.
The captive’s enterprise risk management has also been downgraded to marginal from appropriate. The ratings will remain under review with negative implications pending additional meetings with management, it said.