Press Release - MARCH 06, 2019
AM Best Revises Outlooks to Negative for Members of Philadelphia Contributionship Group
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 06, 2019
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.
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