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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 01, 2021 03:40 PM (EST)
AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Pekin Select Insurance Company (PSIC) (Pekin, IL). The outlook assigned to these Credit Ratings (ratings) is stable. PSIC is a newly formed member of Pekin Insurance Group (Pekin).
The ratings reflect PSIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect the addition of PSIC to the group’s intercompany reinsurance pooling agreement, and PSIC’s strategic importance to Pekin. PSIC writes preferred workers’ compensation business. Additionally, the ratings reflect the execution risk associated with any new business that PSIC will underwrite.
The very strong balance sheet assessment reflects Pekin’s consolidated risk-adjusted capitalization, which is projected to remain at the strongest level over the near term, as measured by Best’s Capital Adequacy Ratio (BCAR). The marginal operating performance reflects Pekin’s below average underwriting performance primarily driven by increased catastrophe losses in recent years and a comparatively high expense structure. With that, management has instituted several profitability initiatives, including expanded use of predictive modeling, pricing changes and significant technology upgrades.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.