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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 06, 2019 02:02 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 Germantown Insurance Company, Philadelphia Contributionship Insurance Company and The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, Inc., which are members of the Philadelphia Contributionship Group (the Contributionship). All companies are domiciled in Philadelphia, PA.
The ratings of the Contributionship reflect the group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks to negative reflect the increased volatility in operating performance over the past five years, which has placed pressure on AM Best’s current assessment of adequate. Increased weather-related events have resulted in underwriting losses in four of the past five years. Management continues to focus on underwriting initiatives, including the reduction of coastal exposures, segmented pricing, enhanced agency management and geographic expansion.
The Contributionship’s balance sheet strength reflects the strongest level of risk-adjusted capitalization, a comprehensive reinsurance program and historically favorable reserve development. Partially offsetting these positive rating factors is elevated common stock leverage compared with the personal property composite.
The Contributionship’s operating performance continues to experience volatility, largely related to weather-related losses while its long-standing market position in the Mid-Atlantic personal property insurance market is supportive of the neutral business profile assessment, serving a niche market of underserved urban areas. The Contributionship also benefits from an appropriate ERM program that supports the risk profile of the organization.
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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