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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 22, 2010 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B+ (Good) and issuer credit rating to "bbb" from "bbb-" of Dakota Group (Dakota) and its members. Dakota is comprised of Dakota Truck Underwriters and First Dakota Indemnity Company (both of Sioux Falls, SD). The outlook for the ICRs is positive, and the outlook for the FSR has been revised to stable from positive.
The rating actions reflect Dakota's strong capitalization, historically positive operating performance in comparison to the workers' compensation industry composite, and specialized market presence as a niche workers' compensation writer in the upper-Midwestern states. Relatively strong after-tax returns and moderating premium volume have led to improved underwriting leverage, which is reflected in a stronger level of risk-adjusted capitalization.
Partially offsetting these positive rating factors are the group's somewhat elevated gross and net underwriting leverage ratios, some liquidity ratios that are below the workers' compensation industry composite norms, as well as a slightly higher level of premium balances receivable when compared to admitted assets and surplus. Despite these concerns, the outlook reflects the expectation that capitalization as well as operating performance will continue to remain supportive of Dakota's operations.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.