A.M. Best Revised Outlook for Kroger Captive Insurers
Vermont-domiciled captives for Kroger face negative rating outlooks after recent underwriting performance declines.
Updated on Oct. 8, 2026 in Corporate Finance
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Rating agency A.M. Best revised the outlook for the long-term issuer credit ratings of Kroger-owned captive insurers Queen City Assurance and Vine Court Assurance from stable to negative. The adjustment reflects ongoing concerns regarding deteriorating underwriting results for the Vermont-domiciled firms.
Why it matters
The shift in outlook signals heightened pressure on operating performance, driven by successive years of high property and casualty losses. For operators, this highlights the necessity of monitoring reserve development and expense containment strategies even within internal insurance vehicles.
A.M. Best maintained the group's A financial strength rating and a+ long-term issuer credit rating, despite shifting the outlook to negative. This decision follows weakened underwriting results in 2024 and 2025 caused by property losses, casualty claims, and reserve development.
The players
Kroger
A major national grocery retailer that utilizes captive insurance entities to manage its corporate risk and insurance coverage.
A.M. Best
A global credit rating agency focused on the insurance industry that assesses the financial strength and creditworthiness of insurers.
Queen City Assurance
A Vermont-domiciled captive insurer owned by Kroger that provides specialized insurance coverage for the parent company.
Vine Court Assurance
A Vermont-domiciled captive insurer owned by Kroger that functions as an internal risk financing vehicle.
The details
The captives managed by Kroger have faced significant pressure from adverse reserve development and a medical expense containment program. While the companies continue to generate positive earnings through investment income, the rating agency expressed concern that the trend of worsening underwriting performance could create broader strain on future operations.
Timeline
2024: Underwriting results weakened due to property losses.
2025: Underwriting results deteriorated due to casualty losses.
October 8, 2026: A.M. Best announced the outlook revision.
Market Landscape
This rating adjustment reflects the ongoing regulatory oversight of captives chartered under Vermont captive insurance statutes. It marks a departure from previously stable assessments as insurers contend with industry-wide trends of elevated casualty losses.
Operators should review their own risk retention and reserve strategies if property or casualty losses have trended upward. Ensure that investment income remains sufficient to offset potential underwriting volatility while monitoring for further rating agency updates.
The takeaway
Maintaining a stable outlook requires proactive management of reserve development and expense containment programs. Review your captive insurer’s loss experience against the prior two years to identify if similar casualty or property trends are impacting your own balance sheet.
Further reading
For more on industry benchmarks and internal risk management, visit the Corporate Finance section.
Source note: This article includes information reported by Business Insurance.
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