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FOR IMMEDIATE RELEASE
OLDWICK - MAY 04, 2021 10:54 AM (EDT)
AM 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 Chesapeake Employers’ Insurance Company (Chesapeake) (Towson, MD). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Chesapeake’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating upgrades reflect Chesapeake’s continued strengthening of its balance sheet, which is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), strong liquidity metrics and low underwriting leverage. Chesapeake has a five-year compound annual surplus growth rate of 17.4%, organically growing surplus year over year through underwriting and investment income. The company’s balance sheet is supported further by loss reserves, which have developed favorably on an accident and calendar-year basis in each of the past ten years. Chesapeake’s underwriting and operating performance is similar to those of the workers’ compensation (WC) composite with results steadily improving, despite management’s guarded expectations as they anticipate further rate decreases in the WC line of business. While Chesapeake is limited to writing WC in Maryland, its business profile assessment reflects its importance in the state, as evidenced by its market share, which has been over 20% for the past five years. Chesapeake maintains an ERM program that AM Best considers appropriate for its size and scope. However, AM Best expects management will continue to build out the sophistication of the program to help achieve its business objectives.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.