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AM Best Upgrades Issuer Credit Rating of Zale Indemnity Company

AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Zale Indemnity Company (ZIC) (Dallas, TX). The outlook of the Long-Term ICR has been revised to stable from positive, while the outlook of the FSR is stable.

These Credit Ratings (ratings) reflect ZIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The upgrade in ZIC’s operating performance to adequate from marginal is supported by management’s decision to retain its operations as a contractual liability insurance policy (CLIP) provider for its ultimate parent, Signet Jewelers Ltd. and its affiliates. ZIC’s revenue comes from fee income associated with its CLIP business, which diminishes underwriting risk, if any, for the captive. The upgrade is further supported by ZIC’s operating performance metrics as both the combined and operating ratios improved significantly over the most recent five-year period.

As a captive insurer of Signet Jewelers Ltd., ZIC is a provider of third-party credit insurance and warranty coverage to the customers of its affiliated retailers. Management has affirmed ZIC’s value to the organization’s growth as ZIC provides a strategic alignment in offering CLIPs on extended warranty agreements in states that require them by law. The operations for ZIC as a CLIP provider limits its underwriting risk, along with limited surplus growth.

ZIC’s ratings reflect its solid level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), strong liquidity and the high credit quality of its investment portfolio. Offsetting rating factors include a limited business profile and limited organic capital growth due to the small size and scope of its operations.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit

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 © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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