CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 19, 2019 01:05 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 Ratings of “a-” of Slavonic Mutual Fire Insurance Association and its wholly owned subsidiary, Slavonic Insurance Company of Texas. Both companies are domiciled in Rosenberg, TX. These companies are collectively known as Slavonic Mutual Group (Slavonic).
These Credit Ratings (ratings) reflect Slavonic’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The revised outlooks to negative reflect Slavonic’s diminishing business profile, which is very constrained as it writes a limited product base within a declining niche market. In addition, it operates within a tight geographic spread in Texas, which exposes it to frequent and severe localized weather events. The company’s niche market of fraternal organizations has declined significantly over the last 10 years due to an aging population and shows no signs of reversal or growth in the near future. Further, Slavonic’s limited product base consists of homeowners insurance that primarily covers fire loses and is limited under the Texas Insurance Code. With greater demand for bundled, comprehensive products, Slavonic’s product offering cannot compete against carriers offering these broader types of products to the public. Therefore, entry into the general population and growth with the declining market of fraternal organizations will remain a challenge for Slavonic. These factors will continue to weigh down on AM Best’s assessment of Slavonic’s business profile over the near-term.
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.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.