Press Release - JUNE 10, 2014
A.M. Best Upgrades Issuer Credit Rating of Shelter Life Insurance Company
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 10, 2014
Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the ICRs of "a+" of Shelter Mutual and Shelter General Insurance Company, together known as Shelter Insurance Companies. Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of "a" of Haulers Insurance Company, Inc. (Haulers) (Columbia, TN) and Shelter Reinsurance Company (Shelter Re). The outlook for all ratings is stable. All companies are domiciled in Columbia, MO, unless otherwise specified.
The upgrading of the ICR reflects Shelter Life's role as an important strategic subsidiary of Shelter Mutual, its integration within the group and the implicit support provided by Shelter Mutual. The ratings also recognize Shelter Life's strong risk-adjusted capitalization, favorable operating performance and its focus on traditional ordinary life distributed through its property/casualty agents.
Offsetting rating factors include geographic concentration of its in-force business, its dependence on a single multi-line distribution channel, limited product portfolio and a modest overall market profile.
A.M. Best believes positive rating movement for Shelter Life is unlikely in the near term. Future negative rating actions could occur should Shelter Life experience deterioration in operating results, a significant drop in risk-adjusted capitalization or a negative change in the rating of its parent, Shelter Mutual.
The rating affirmations for the property/casualty operations acknowledge their solid risk-adjusted capitalization, overall improved operating performance, conservative reserving philosophy and diverse business profile. These positive rating factors are partially offset by the group's exposure to frequent and severe weather-related events and earthquakes. However, these exposures are manageable and partially mitigated through a comprehensive reinsurance program.
While the ratings and outlook were affirmed, negative rating movements could occur if there is a continuation of the deterioration in operating results that occurred in 2011, driven by significant catastrophe losses causing capitalization to erode.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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