WT Holdings ratings affirmed as KBRA keeps stable outlook on insurance units

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WT Holdings KBRA ratings stable

Highlights

KBRA affirms ratings of Stillwater Insurance Company, Stillwater Property and Casualty, and Evergreen National Indemnity Company, maintaining a stable outlook on improved underwriting performance and capitalization.
Stillwater's combined ratio improves from 116.7% in 2024 to 107.6% in 2025 and 92.5% in first half of 2026, with policyholders’ surplus rising to about $246.0 million by June 30, 2026.
Evergreen's net underwriting income reaches about $1.6 million and surplus rises to $51.3 million in first half 2026, but both Stillwater and Evergreen face constraints from catastrophe, concentration, and investment risk exposures.

Rating rationale and operating trends

As reported by Kroll Bond Rating Agency, the affirmation reflects improving underwriting performance and capitalization at Stillwater Insurance Company and Stillwater Property and Casualty Insurance Company, alongside Evergreen National Indemnity Company’s strong capital profile and steady profitability in specialty surety.

For Stillwater, KBRA says management actions on pricing, underwriting, claims and exposure management continue to support better results. SIC’s combined ratio improves to 107.6% in 2025 from 116.7% in 2024, then improves further to 92.5% in the first half of 2026. Policyholders’ surplus rises to about $246.0 million at June 30, 2026 from $214.8 million at year-end 2025, while the company continues to benefit from a distribution network of more than 3,500 independent agencies and brokers and several large national insurance organizations.

Evergreen’s affirmed rating is supported by very strong risk-adjusted capitalization, low underwriting and reserve leverage and favorable earnings in its niche surety operations focused mainly on the waste and landfill segment. In the first half of 2026, the insurer reports about $1.6 million in net underwriting income and $2.4 million in net income, while favorable prior-year reserve development totals about $2.5 million. Policyholders’ surplus increases to about $51.3 million from $49.8 million at year-end 2025 despite a $1.25 million shareholder dividend, and the company’s 2025 investment portfolio shift reduces common stock exposure in favor of fixed-income securities.

Key constraints and outlook triggers

KBRA says Stillwater’s ratings remain constrained by catastrophe exposure, adverse reserve development history, concentration in personal lines and California, and ongoing pressure in personal auto. Gross catastrophe losses total about $122.7 million in 2025, driven primarily by the Eaton and Palisades California wildfires, though reinsurance materially limits the effect on net results. Homeowners account for about 71% of SIC’s 2025 direct written premium, while California represents about 48%, and personal auto results remain under strain despite rate increases and improved segmentation.

Evergreen also faces constraints from concentration in waste and landfill surety, remaining exposure to higher-risk investments and key person risk tied to its specialized business model. Waste and landfill business represents about 69% of 2025 net earned premium, and below-investment-grade fixed-income securities and Schedule BA assets remain meaningful relative to surplus even after portfolio de-risking.

KBRA says positive rating action for Stillwater and WT Holdings could follow sustained underwriting profitability, continued surplus growth, stronger risk-adjusted capitalization, better reserve adequacy and lower catastrophe-related earnings volatility, or improved financial leverage and fixed-charge coverage at the holding company. Negative action could result from weaker underwriting performance, renewed reserve pressure, major catastrophe losses, increased concentration, weaker reinsurance protection or deterioration in WT Holdings’ leverage, coverage or liquidity. For Evergreen, upside could come from sustained profitable underwriting, continued surplus growth, further reduction in higher-risk investments or broader product diversification, while downside could follow weaker profitability, reserve deterioration, investment losses or a weakening of its waste and landfill surety franchise.

Our earlier coverage of Hurricane Lala’s impact on Hawaii highlighted how the storm’s wind, flood, and infrastructure damage could translate into a sizable wave of insurance claims. We noted that prolonged power outages and multi-line exposure may complicate loss assessments, with the ultimate payout level depending on how quickly and clearly damage estimates emerge.

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