AM Best


A.M. Best Affirms Ratings of Safety Insurance Group, Inc. and Its Subsidiaries


CONTACTS:

Jonathan Harris, CFA, FRM
Senior Financial Analyst
+1 908 439 2200, ext. 5771
jonathan.harris@ambest.com

Jacqalene Lentz, CPA
Managing Senior Financial Analyst
+1 908 439 2200, ext. 5762
jacqalene.lentz@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 09, 2016 03:09 PM (EDT)
A.M. Best has affirmed the issuer credit rating (ICR) of “bbb+” of Safety Group’s (Safety) publicly traded holding company, Safety Insurance Group, Inc. (Delaware) [NASDAQ/GS: SAFT]. Concurrently, A.M. Best has affirmed the financial strength rating of A (Excellent) and the ICRs of “a+” of the subsidiaries of Safety Insurance Group, Inc.: Safety Insurance Company, Safety Indemnity Insurance Company and Safety Property and Casualty Insurance Company, collectively known as Safety. The outlook for each rating is stable. All companies are domiciled in Boston, MA, except where specified.

The ratings of Safety reflect its solid risk-adjusted capitalization, primarily driven by conservative investment risk, favorable loss reserve development trends and controlled premium growth. In addition, Safety has historically reported strong operating performance. These positive rating factors are derived from management’s disciplined underwriting approach and successful history in dealing with the challenges in Massachusetts, where it writes the majority of its business. Furthermore, Safety’s publicly traded parent, Safety Insurance Group, Inc., affords some financial flexibility.

These positive rating factors are partially offset by Safety’s concentration of business in Massachusetts that exposes it to regulatory and legislative actions, in addition to the property catastrophe risk that has increased over several years and is anticipated to continue in the future. This geographic concentration risk was particularly evident in the group’s 2015 results. Results for 2015 were negatively impacted by the highest recorded snowfall totals in Massachusetts history, which produced elevated catastrophe and non-catastrophe claims throughout the group’s personal and commercial property lines of business. In an effort to mitigate exposure to property loss, Safety closely manages its catastrophe risks through stringent underwriting guidelines, a formal enterprise risk management program and a comprehensive reinsurance program.

While the ratings are stable, positive rating actions could occur if there were sustained long-term improvement in operating performance and continuation of strong overall capitalization. Negative rating actions could occur if there were unfavorable operating performance, a sudden large or catastrophic event that materially hinders its risk-adjusted capitalization or any material adverse deviation from the company’s submitted financial projections.

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 see A.M. Best’s Recent Rating Activity web page.

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