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FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 09, 2019 01:33 PM (EST)
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Florida Family Insurance Company (FFIC) and its subsidiary, Florida Family Home Insurance Company (FFHIC), which together make up the two pool members of Florida Family Group (Florida Family). Both companies are domiciled in Bonita Springs, FL.
The ratings reflect Florida Family’s balance sheet strength, which AM Best categorizes as strong, as well as its historically strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revised outlooks reflect the downturn in operating performance in recent years, which has placed pressure on the current assessment of strong. While the operating performance has been impacted by hurricane activity in recent years, the negative outlooks also consider the underlying performance, which has been impacted unfavorably by water-related losses and declining premium. Florida Family has implemented a number of actions to improve performance, including rate increases, non-renewal of undesirable risks, enhancement of rating plans, the closure of new business in specific areas of Florida and the effective management of Assignment of Benefits issues.
Florida Family’s strong balance sheet is supported by very strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) at the 99.6 VaR level, favorable loss reserve development and a conservative investment portfolio partially offset by elevated underwriting leverage. The business profile assessment reflects Florida Family’s limited operating territory within a hurricane-prone state. Severe weather continues to be Florida Family’s primary risk and much of its ERM program has been appropriately centered around mitigating this exposure through a comprehensive catastrophe reinsurance program, strategic placement of coverage and strict underwriting guidelines. While Florida Family has always been acutely aware of its risks, management recently approved formalized documentation of the policies, procedures and risk tolerances that drive its ERM program.
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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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