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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 10, 2015 02:20 PM (EDT)
A.M. Best has assigned a financial strength rating (FSR) of A- (Excellent) and an issuer credit rating (ICR) of "a-" to Little River Insurance Company (Little River) (Goldsboro, NC).The outlook assigned to both ratings is stable. A.M. Best also has affirmed the FSR of A- (Excellent) and the ICR of "a-" of Atlantic Casualty Insurance Company (Atlantic Casualty) (Goldsboro, NC). The outlook for both ratings is stable.
The ratings assigned to Little River are the result of a pooling arrangement with Atlantic Casualty, effective Jan. 1, 2015. Atlantic Casualty will retain 96% of the pool, while Little River will hold 4% of the pool.
The ratings reflect the group's strong consolidated capitalization, long history of profitability and solid operating performance, as well as its sound risk management practices. The group is led by a management team with a track record of generating strong results and possessing extensive knowledge of the small surplus lines commercial property/casualty business.
Negative rating factors include weakened underwriting performance since 2011 compared with earlier years, despite modest improvement in 2014, due to soft (albeit firming) market conditions, moderate variability in reserve development, and the impact of an accumulation of weather-related losses mainly in 2011 and 2012. Management also faces the challenge of growing profitably given current market conditions despite the company's position as a surplus lines writer.
The outlooks reflect A.M. Best's expectations that recently enacted rate increases, the realization of a firming market, and ongoing improvements in the company's systems will, along with the company's strong risk management culture, enable the group to realize improved earnings in the near term.
Future positive rating action could occur if the group generates an improved and sustained trend of strong underwriting income, operating returns and surplus growth. Negative rating action may occur following a material deterioration in operating performance or an unexpected and material decline in risk-adjusted 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.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.