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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 20, 2012 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a+” of Courtesy Insurance Company (Courtesy) (Deerfield Beach, FL). The outlook for both ratings has been revised to stable from positive.
The affirmation of Courtesy’s ratings reflects its solid capitalization, excellent historical operating performance and the additional financial benefits derived from its affiliation with JM Family Enterprises, Inc. (JM Family).
These rating factors are supported by Courtesy’s favorable pre-tax operating returns, which have benefited from expense controls, pricing discipline and management’s niche market expertise in the auto warranty business. These factors are further supported by the favorable operating synergies and efficient marketing and distribution platforms provided by JM Family, a diversified automotive company with approximately $9 billion in revenue and ranked by Forbes as the 27th-largest privately held company in the United States.
The revised outlook reflects Courtesy’s captive orientation and the inherent challenges related to the scope of its parent’s business profile, which is concentrated in the U.S. automotive industry. Since Courtesy’s operations are captive in nature, the interdependency among the affiliates of JM Family plays an important role in Courtesy’s ratings.
Courtesy is a property/casualty company specializing in a variety of insurance products for retail automotive dealers, which insure obligations assumed under various automotive-related service products.
Courtesy is a part of the JM&A Group, which is one of the largest independent providers of finance and insurance products in the automotive industry and a division of JM Family.
Possible upward rating actions on Courtesy’s ratings could result from continued strengthening in the financial condition of JM Family. Conversely, possible downward rating actions could result from a significant decline in the company’s operating performance and capitalization or a significant decline in the financial condition of the parent.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.