Best’s News & Research Service - December 10, 2020 11:07 AM (EST)
AM Best Affirms Credit Ratings of First Colonial Insurance Company
- December 10, 2020 11:07 AM (EST)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of First Colonial Insurance Company (First Colonial) (Jacksonville, FL). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect First Colonial’s balance sheet strength, which AM Best categorizes as very strong, as well as its weak operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect the company’s very strong balance sheet, anchored by its strongest risk-adjusted capitalization, as measured by Best’ Capital Adequacy Ratio (BCAR), and its well-managed investment portfolio. Partially offsetting these factors is First Colonial’s high dependence on reinsurance, which is inherent of its business strategy as a distributor of automobile warranty and protection products. The company’s weak operating performance reflects recent volatility and negative trends in underwriting results tied to certain lines of business. First Colonial has taken numerous actions to regain profitability, which has resulted in improved operating results more recently. AM Best notes that the company continues to supplement its core product income with a suite of ancillary product offerings, as well as from fee income from affiliates companies within the Allstate Dealer Services Group. First Colonial’s ratings also benefit from the explicit and implicit support provided by The Allstate Corporation (AllCorp), its ultimate parent. As a subsidiary of Allcorp, First Colonial benefits from its expansive market presence and brand-name recognition.
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 Guide to 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 analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.