AM Best Information Services

DECEMBER 06, 2018 09:34 AM (EST)

AM Best Upgrades Credit Ratings of Bankers Insurance Company and Its Subsidiaries

 Christopher Draghi
Senior Financial Analyst
+1 908 439 2200, ext. 5043

Michelle Baurkot
+1 908 439 2200, ext. 5314

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - DECEMBER 06, 2018 09:34 AM (EST)
AM Best has upgraded the Financial Strength Rating (FSR) to B++ (Good) from B+ (Good) and Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb” from “bbb-” of Bankers Insurance Company (Bankers) (St. Petersburg, FL) and its property/casualty subsidiaries, Bankers Specialty Insurance Company (Metairie, LA) and First Community Insurance Company (St. Petersburg, FL). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect the balance sheet strength of Bankers and its subsidiaries, which AM Best categorizes as very strong, as well as their marginal operating performance, limited business profile and appropriate enterprise risk management.

The upgrade reflects sustained improvement in risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is categorized as very strong. While maintaining a comprehensive catastrophe reinsurance program, Bankers and its subsidiaries have strategically refined their personal lines exposure to reduce the potential severity of severe weather events, which has driven the improved BCAR position. Furthermore, following a comprehensive loss reserve review, the group addressed recent shortfalls in runoff lines of business through material reserve strengthening in 2017. Initial indications reflect overall favorable loss reserve development in 2018 with the expectation for this trend to continue in the near-term as a result of the corrective actions. The company’s balance sheet strength assessment also includes consideration for the conservative investment portfolio, which is predominantly comprised of high quality fixed-income securities and avoids significant exposure to volatility in the equity market.

Bankers and its subsidiaries have implemented several profitability initiatives in an effort to improve future results. These actions include the identification and runoff of undesirable business lines, non-renewal of unfavorable homeowners business, the reduction of risk accumulations in hurricane-prone areas, refinement in underwriting platforms and guidelines, and the termination of a quota share agreement in order to retain more profitable business. AM Best expects these actions to improve future operating performance, which in turn will support the capital position in future periods.

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 Understanding 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 rating agency and information provider with a unique focus on the insurance industry.

Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.