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AM Best Affirms Credit Ratings of Constitution Insurance Company

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Constitution Insurance Company (Constitution) (Cambridge, NY). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Constitution’s balance sheet strength, which AM Best assess as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Constitution is wholly owned by Steven Menzies, its chief executive officer, and participates in a quota share reinsurance transaction of workers’ compensation business from a commonly owned insurer.

Constitution is well-capitalized on a risk-adjusted basis as of year-end 2022 and holds no debt on its balance sheet. The company maintains a conservative investment portfolio composed of approximately two-thirds cash and cash equivalents with the balance being high quality fixed income investments and real estate. While this large cash position provides increased liquidity to the company, it has historically impacted the portfolio’s total yield negatively, though the company is currently benefiting from the higher interest rate environment.

Constitution’s evolving business profile has resulted in volatility in performance metrics over the last several years, but these have largely trended in a favorable direction as operations stabilized. This can be seen in the combined ratio, which has declined from a high of 309.3% in 2018 to 102.3% in 2022. Earlier, less favorable combined ratios were driven primarily by low premium volumes, as the company transitioned to its current business plan.

Constitution’s business profile maintains some geographic and product concentrations, though the quota share contracts assumed from a related party have alleviated concerns to some degree as it has increased diversification and improved overall performance.

Constitution’s ERM practices are appropriate for its size and scope. Risk management is a focal point for management, and the company is well-attuned to the risks impacting its markets. The company maintains well-established conservative underwriting guidelines that have been historically profitable.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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