Pie’s Financial Strength Rating of A- Under Review by AM Best *Centurion Insurance AFS*

Insurance industry rating agency AM Best on Friday put the financial strength rating of Pie Insurance Group under review with negative implications.

Pie Insurance Company of Columbus and Pie Casualty Insurance Company of Chicago currently have a financial strength rating of A- (Excellent) and long-term issuer creating rating of a- (Excellent) from AM Best.

The agency said the action was prompted after Pie’s financial results for 2023, “which included material underwriting losses brought on by adverse reserve development in its New York book of business.”

“Although reserves have stabilized since third-quarter 2023, the magnitude of the development is concerning and has had an adverse impact on Pie’s risk-adjusted capital position,” AM Best added in a statement.

About a year ago, insurtech Pie Insurance—following the acquisition of American Insurance Company—transitioned from a managing general agent for SiriusPoint America Insurance Company and announced it completed its transition to a full-stack carrier to provide workers’ compensation to small businesses. It then earned the A- rating from AM Best.

At that time, CEO John Swigart said AM Best is “the premiere authority on the financial stability of insurance companies and their validation promotes the utmost confidence in our ability to serve our independent agency partners and small business customers across the country.”

In the latest announcement, AM Best said Pie’s balance sheet is “very strong” but it is “closely monitoring” strategic initiatives to address a decline in risk-adjusted capital.

In September 2022 Pie Insurance said it raised a $315 million Series D round of funding. It was the largest round of financing for any U.S. based P/C insurtech company in 2022, and more than doubled Pie’s total capital raised at the time to more than $615 million.

However, Swigart said the deterioration of the funding market since the Series D round led to expense reductions that in May 2023 included laying off 14% of employees. During Carrier Management’s InsurTech Summit earlier that month, Swigart said the inability to raise funding would continue to be challenging.

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AM Best