Press Release - FEBRUARY 06, 2015
A.M. Best Revises Issuer Credit Rating Outlook to Positive for ARAG Insurance Company
FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 06, 2015
The outlook revision to positive reflects A.M. Best's view that ARAG's strong risk-adjusted capitalization and consistently strong underwriting performance will continue in the near term, and if so, positive rating action will likely occur. The ratings also reflect the company's expertise in providing coverages within the group legal expense market. Partially offsetting these positive rating factors are ARAG's heightened business risk as a mono-line carrier with its five largest policyholders currently accounting for approximately 40% of total premiums earned, and high annual dividend payments to its parent company, ARAG North America, Incorporated.
Factors that may lead to positive rating actions include a continuation of strong underwriting and operating performance in the near term, while maintaining strong overall capitalization. Factors that could lead to negative rating actions include a sustained weakening in underwriting and operating profitability and/or material weakening in overall capitalization.
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.
Key insurance criteria reports utilized:
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center .
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