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FOR IMMEDIATE RELEASE
OLDWICK - MAY 10, 2017 03:37 PM (EDT)
A.M. Best has affirmed the Long-Term Issuer Credit Rating (Long-Term 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 Long-Term 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 of these Credit Ratings (ratings) is stable. All companies are domiciled in Boston, MA, except where specified.
The ratings of Safety are based on its solid risk-adjusted capitalization, strong operating performance, favorable loss reserve development trends and disciplined underwriting. These positive rating factors are derived from management’s ability to successfully manage 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.
Partially offsetting these positive rating factors are 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. Although current year-end results are favorable, the impact of this geographic concentration risk was evident in the group’s 2015 results, which were impacted negatively by the highest recorded snowfall totals in Massachusetts history, in the group’s personal and commercial property lines of business. In an effort to reduce gross exposure to property loss, Safety closely manages its catastrophe risks through stringent underwriting guidelines, rate actions, 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 deterioration of underwriting and operating performance, occurrence of a sudden large or catastrophic loss event that materially hinders risk-adjusted capitalization or any material deviation from the company’s submitted financial projections.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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