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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 18, 2019 01:59 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Protective Property & Casualty Insurance Company (Protective) (St. Louis, MO). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Protective’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile, appropriate enterprise risk management (ERM) and rating lift from its parent, Protective Life Insurance Company.
Protective specializes in providing coverage for vehicle service contracts and guaranteed asset protection products sold primarily through franchise dealers and independent agents. The balance sheet strength assessment is based upon the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) model, good asset quality with adequate balance sheet liquidity, and offset in part by the company’s significant use of unrated affiliated producer-owned reinsurers. AM Best considers operating performance to be strong based on the company’s consistent track record of profitability that outperforms the overall property/casualty industry. The limited business profile is mainly due to the concentration of underwriting risk in auto warranty lines, subjecting the company’s performance to changes in: auto sales and financing; consumer preference; regulatory and economic conditions; and claims frequency and severity trends. Given the company’s successful operations throughout the United States, its emerging ERM program is considered adequate for its size and scope of operations.
Rating enhancement has been afforded due to the implied support from Protective’s higher rated parent, its integration into the organization and its support of the organization’s asset protection strategy. Protective is the former Lyndon Property Insurance Company. The name was changed in 2016 to better align the company with its parent.
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.
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