Press Release - SEPTEMBER 28, 2018
A.M. Best Affirms Credit Ratings of Louisiana Dealer Services Insurance Inc and Subsidiaries
FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 28, 2018
The ratings reflect The LDS Group’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating affirmations of The LDS Group recognize its historical profitability, strong capitalization, and established market position as a vehicle service contract provider, mechanical breakdown insurer and credit life and credit disability insurer in Louisiana and Mississippi. The ratings also recognize each companies’ role within the group, and the purposes they serve in their respective states, as well as the same inherent benefits afforded by common management, marketing and shared services.
The group has consistently produced favorable underwriting results, which have been complemented by a stable level of investment income. A profitable overall earnings trend and relatively modest dividend requirements have contributed to surplus growth and a sustained solid level of risk-adjusted capitalization.
While recognizing the group’s solid capital position and consistent profitability, A.M. Best notes that growth within the enterprise depends upon the health and strength of the economy, specifically domestic auto sales. A.M. Best also notes that while auto sales have improved over the past few years, a potential decrease in consumer activity can adversely impact the associated opportunities to market these companies’ core credit products.
The stable outlooks reflect A.M. Best’s expectation that the company’s rating fundamentals will remain unchanged over the medium term.
Negative rating actions could occur if there is a material reduction in The LDS Group’s risk-adjusted capitalization. Negative rating action also could occur should operating performance deteriorate over a period of time. This may occur should underwriting standards decline, pricing becomes inadequate, or if claims frequency and severity trend upward.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-”, each with a stable outlook have been affirmed for the subsidiaries of Louisiana Dealer Services Insurance Inc:
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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