AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of pet health insurance provider Independence American Insurance Co. (IAIC). The outlooks assigned to these credit ratings is stable.
AM Best said the ratings have been removed from under review following IAIC’s renegotiation and re-implementation of its pet insurance quota share reinsurance contracts and an additional $125 million contribution from its parent, Independence Pet Holdings, Inc., both of which occurred in the third quarter of 2025.
The ratings reflect the Delaware company’s balance sheet strength, which AM Best has assessed as “very strong,” as well as its “adequate operating performance, limited business profile and appropriate enterprise risk management.”
AM Best said the balance sheet strength assessment of very strong reflects IAIC’s investment portfolio. According to AM Best, IAIC has ample sources of liquidity and has no debt within its financial structure and the company has demonstrated capital and surplus growth, with the trend continuing into the third quarter of 2025.
IAIC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), was considered strong at year-end 2024. The decline in the company’s BCAR at year-end 2024 was due to the refiling of the 2024 annual statements to reflect deposit account on the reinsurance contracts effective Jan. 1, 2024. AM Best said the company’s BCAR improved to the strongest level with the re-implementation of its reinsurance contracts and the $125 million of capital contributed in the third quarter. Additionally, the BCAR is projected to remain at the strongest level for 2025, the ratings firm reported.
According to AM Best, IAIC has grown premiums in each of the past five years, with “substantial growth over that time, driven by various acquisitions and organic growth.” Its reinsurance contracts resulted in a substantial increase in net premiums in 2024. Net premiums are expected to decline slightly in 2025 due to the re-implementation of reinsurance agreements effective July 1, 2025.
IAIC’s operating earnings were positive in 2024 and through the third quarter of 2025, driven by efficiencies. Net income through the third quarter of 2025 was $44.3 million, driven by strong underwriting and investment gains.
While the company is concentrated in pet insurance products, it diversifies by offering both individual and group coverage. The company is one of the largest pet insurance companies in the country following various recent acquisitions and organic growth. In 2022, IAIC acquired Crum & Forster’s pet insurance business; in 2024 it acquired Pets Best; and in 2023, it bought cat health insurer Felix.
IAIC operates under Independence Pet Holdings and partners with brands like ASPCA, Figo (including Costco sales), Pets Plus Us (Canada), AKC Pet Insurance (via Pet Partners), and 24 Pet Watch. These units offer white-label and co-branded pet insurance products.
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