Press Release - JULY 19, 2019

AM Best Affirms Credit Ratings of Fortegra Financial Corporation’s Insurance Subsidiaries


CONTACTS:
 Christopher Jackson
Financial Analyst—P/C
+1 908 439 2200, ext. 5721
christopher.jackson@ambest.com

Richard Francis
Senior Financial Analyst—L/H
+1 908 439 2200, ext. 5152
richard.francis@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

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

FOR IMMEDIATE RELEASE

OLDWICK - JULY 19, 2019
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of the rated operating subsidiaries of Fortegra Financial Corporation (Fortegra) (headquartered in Jacksonville, FL). Fortegra is a wholly owned subsidiary of publicly traded parent company, Tiptree Inc. [NASDAQ:TIPT]. The property/casualty operating subsidiaries of Fortegra include Lyndon Southern Insurance Company (Wilmington, DE), Insurance Company of the South (Athens, GA), Response Indemnity Company of California (Redondo Beach, CA) and Blue Ridge Indemnity Company (headquartered in Jacksonville, FL), which operate under an intercompany pooling agreement and are collectively referred to as Fortegra P&C Group. The life/health operating subsidiaries include Life of the South Insurance Company (Athens, GA), Bankers Life of Louisiana (Marksville, LA) and Southern Financial Life Insurance Company (Scottsville, KY), which are collectively referred to as the Life of the South Group. The outlook of these Credit Ratings (ratings) is stable.

The ratings of Fortegra P&C Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Fortegra P&C Group’s balance sheet strength reflects its strongest level of risk-adjusted capitalization, prudent investment portfolio and comprehensive reinsurance program. Partially offsetting these positive factors is the substantial reliance on third-party reinsurance to provide capacity, which is demonstrated by its extremely high ceded reinsurance leverage, somewhat mitigated by the use of collateral and modest loss reserve volatility.

Fortegra P&C Group’s operating performance is categorized as adequate. The group has produced solid operating earnings over the past five years, primarily driven by profitable underwriting results coupled with growing investment earnings. AM Best considers the group’s business profile as neutral due to its solid geographic and product spread of risk. AM Best acknowledges the appropriate ERM program for the Fortegra P&C Group organization, as it has developed a formalized process with risk identification, management and mitigation.

The ratings of the Life of the South Group reflect its balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

Additionally, the ratings acknowledge the group’s strong consolidated balance sheet strength that includes the strongest level of risk-adjusted capitalization. The ratings also recognize the group’s adequate net operating performance, derived primarily from its profitable credit life and credit accident and health businesses, and stable relatively premium trends. AM Best believes the group may be challenged to sustain and improve its net operating performance given the challenges of the persistent low interest rate environment and the expense strains expected from anticipated new business growth. The Life of the South Group’s business profile is neutral with good market positioning for its lines of business, although the products are concentrated entirely in credit life and health offerings. Life of the South Group’s ERM is managed across Fortegra’s operations and is considered appropriate.

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.


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