|Sharon Pereira Marks|
Senior Financial Analyst
+1 908 439 2200, ext. 5477
Charles M. Huber
+1 908 439 2200, ext. 5122
Manager, Public Relations
+1 908 439 2200, ext. 5159
Director, Public Relations
+1 908 439 2200, ext. 5644
FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 22, 2016 10:39 AM (EST)
A.M. Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Colonial Surety Company (CSC) (headquartered in Woodcliff Lake, NJ). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect CSC’s solid risk-adjusted capitalization, strong profitability and local presence within the small to medium-size contract surety market, which is supported by the company’s conservative operating philosophy and the continued benefits derived from its proprietary contractor database and Internet-based strategy.
Partially offsetting the positive rating factors are the company’s elevated, albeit improving, reinsurance dependence and geographic concentration, which somewhat exposes it to local regulatory and market conditions with a majority of its gross premium derived from a few states. The ratings also contemplate the execution risk associated with management’s growth and expansion plans within its fidelity and non-contract surety books of business.
Negative rating action could result from a sudden spike in losses, due to a significant accumulation of claims or inadequate loss reserves, which leads to deterioration in risk-adjusted capitalization. Negative pressure on the ratings could also occur if rapid growth is not adequately priced or underwriting standards are sacrificed, resulting in an unfavorable underwriting performance trend.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.