MARCH 02, 2020 08:05:11 Eastern Standard Time
AM Best Assigns Credit Ratings to Members of SFM Companies
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 02, 2020 08:05:11 Eastern Standard Time
The ratings reflect SFM’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
SFM’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is categorized as strongest, and AM Best expects it to remain at a similar level in future years. The balance sheet strength assessment also considers the company’s low reinsurance dependence, improving liquidity and elevated underwriting leverage ratios.
SFM has generated an adequate level of operating performance, predominantly supported by moderate underwriting gains and a consistent stream of investment income. SFM’s limited business profile is due to the group being monoline workers’ compensation insurers with modest geographic concentration. While the group is licensed and operating in 30 states, it does business primarily in five core states: Minnesota, where it is the market-share leader, Wisconsin, Iowa, Nebraska and South Dakota. This leaves SFM susceptible to potential legislative, regulatory or judicial changes in the workers’ compensation market. Risk-management capabilities are considered appropriate for the risk profile of the group.
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 Guide to 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 credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.