AM Best Information Services

FEBRUARY 15, 2012 12:00 AM (EST)

A.M. Best Upgrades Ratings of Plateau Insurance Company

Anthony McSwieney
Senior Financial Analyst
(908) 439-2200, ext. 5715

William Pargeans
Assistant Vice President
(908) 439-2200, ext. 5359

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK, N.J. - FEBRUARY 15, 2012 12:00 AM (EST)
A.M. Best Co. has upgraded the financial strength rating (FSR) to A- (Excellent) from B++ (Good) and issuer credit rating (ICR) to “a-” from “bbb+” of Plateau Insurance Company (PIC). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of “a-” of PIC’s parent company, Plateau Casualty Insurance Company (PCIC). The outlook for all ratings is stable. Both companies are domiciled in Crossville, TN.

The rating upgrades consider PIC’s consistent growth in capital as reflected in its solid risk-adjusted capitalization, as well as its positive earnings stream and the expanded geographic diversification in its distribution network. The ratings also reflect A.M. Best’s view of PIC’s role as a subsidiary of the Plateau Group, Inc. (life and property/casualty), its ability to deliver a broad range of credit insurance product offerings and services to its customers, and the synergies gained by common management, marketing platforms and shared services.

A.M. Best also notes that PIC’s investment portfolio is very short term in nature with little interest rate risk and high levels of liquidity. A.M. Best believes that PIC is well positioned to grow premium volume organically given the growth in its distribution network, and opportunistically from business flow from entities exiting the credit insurance market.

While recognizing PIC’s solid capital position and the 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 notes that while auto sales have improved over the past year, a potential decrease in consumer activity can still adversely impact the associated opportunities to market the company’s core credit products. Additionally, the ratings consider the challenges PIC faces in balancing a high level of new premium growth while maintaining its historical consistent financial profitability in the short term.

The rating affirmations of PCIC recognize its historical profitability, niche market expertise and supportive capitalization. The rating affirmations also recognize PCIC’s role within the Plateau Group, its importance as a licensed property/casualty insurer within the group as well as the same inherent benefits afforded by common management, marketing and shared services. PCIC is primarily a credit property/casualty insurance writer that offers various consumer credit insurance products marketed by consumer finance companies and community banks, and extended service contracts as well as GAP insurance marketed by automobile dealers.

A.M. Best believes the companies are well positioned at the current ratings.

Negative rating actions could occur if PIC’s capitalization and/or operating performance falls markedly short of A.M. Best’s expectations. Negative rating pressure also could occur if the business profile and/or the relative importance of either insurance company changes materially.

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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Life/Health Insurers”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; and “Assessing Country Risk.” Best’s Credit Rating Methodology can be found at

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