A.M. Best Revised Outlook for Kroger Captive Insurers
Credit outlooks shifted to negative for two Vermont-domiciled insurers after consecutive years of poor underwriting.
Updated on Oct. 8, 2026 in Corporate Finance
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Rating agency A.M. Best has revised the outlook on the long-term issuer credit ratings for Queen City Assurance and Vine Court Assurance from stable to negative. The two Vermont-based captive insurers, owned by Kroger, continue to hold their existing financial strength and issuer credit ratings.
Why it matters
The outlook change reflects concerns regarding the group's future operating performance following recent underwriting volatility. Deteriorating results in 2024 and 2025 have prompted scrutiny of the captives' ability to maintain profitability under current pressure.
A.M. Best maintained an A financial strength rating and a+ long-term issuer credit rating for the group. The outlook on the financial strength rating remains stable.
The players
A.M. Best
This global credit rating agency specializes in the insurance industry and provides analysis on financial stability.
Kroger
This major American retail company operates a large network of grocery stores and supermarkets across the United States.
Queen City Assurance
This is a captive insurance company domiciled in Vermont that is owned by the retail corporation Kroger.
Vine Court Assurance
This is a captive insurance company domiciled in Vermont that is owned by the retail corporation Kroger.
The details
Kroger's captive insurers in Vermont faced underwriting weaknesses in 2024 due to high property losses and further deterioration in 2025 from elevated casualty losses. These issues stem from adverse reserve development and challenges related to a medical expense containment program, despite the group remaining profitable through investment income.
Timeline
Underwriting results weakened during 2024 as a result of property losses.
Casualty losses caused underwriting results to deteriorate throughout 2025.
A.M. Best officially announced the outlook revision on October 8, 2026.
Market Dynamics
This outlook adjustment follows established protocols in A.M. Best's captive insurance credit rating methodology regarding underwriting volatility. The rating action illustrates the standard process for reassessing captive risk profiles when underlying operational performance shifts.
While the captives maintain their current financial strength ratings, stakeholders should monitor how Kroger balances investment income against ongoing underwriting losses. This revision indicates a need for management to stabilize operating performance to prevent potential future credit downgrades.
The takeaway
Captive insurers must navigate periods of underwriting loss by leveraging diversified investment income to maintain overall financial stability. Companies often face rating pressure when specific internal programs fail to contain costs or mitigate losses effectively.
Further reading
For more background on regional industry developments, explore the Corporate Finance section.
Source note: This article includes information reported by Business Insurance.
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