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Best’s News & Research Service - June 03, 2016 10:28 AM (EDT)

A.M. Best Upgrades Issuer Credit Rating of Shelter Reinsurance Company

  • June 03, 2016 10:28 AM (EDT)
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Oldwick //BestWire// - A.M. Best has upgraded the issuer credit rating (ICR) to “a+” from “a” and affirmed the financial strength rating (FSR) of A (Excellent) of Shelter Reinsurance Company (Shelter Re). A.M. Best also has affirmed the FSR of A (Excellent) and the ICRs of “a+” of the other members of the Shelter Insurance Companies (group): Shelter Mutual Insurance Company (Shelter Mutual), Shelter General Insurance Company and AmShield Insurance Company.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a” of Haulers Insurance Company, Inc. (Haulers) (Columbia, TN) and the FSR of A (Excellent) and the ICR of “a+” of Shelter Life Insurance Company (Shelter Life), both of which are wholly owned subsidiaries of Shelter Mutual.

The outlook for each rating is stable. All companies are domiciled in Columbia, MO, unless otherwise specified.

The upgrading of Shelter Re’s ICR is based on the company’s growing role and importance within the group, which therefore warrants the full rating enhancement. Shelter Re is responsible for a material amount of the group’s earnings and net income. It also is fully integrated with the parent, provides non-correlated domestic and foreign diversification and is supported by internal catastrophe reinsurance. Shelter Re’s rating is further supported by strong risk-adjusted capitalization and historically favorable operating performance, which is partially offset by a somewhat limited profile in the reinsurance market.

The group’s rating affirmations are reflective of its strong risk-adjusted capitalization, moderate underwriting leverage, conservative reserving philosophy and well-established regional market presence. Partially offsetting these positive rating factors is the group’s variable, albeit improving, operating performance, mainly due to its exposure to frequent and severe weather-related events.

Haulers’ ratings acknowledge its solid stand-alone risk-adjusted capitalization and the explicit support provided by its parent, Shelter Mutual, which is expected to improve the company’s operating performance in the near term.

The ratings of Shelter Life reflect its role as a strategic subsidiary of Shelter Mutual, its strong risk-adjusted capitalization, consistently positive operating performance, excluding reserve adjustments, and its focus on the highly creditworthy ordinary life line of business distributed through captive agents. Offsetting these rating factors are the geographic concentration of Shelter Life’s in-force business and its limited market profile.

In future rating cycles, the ratings and outlooks could benefit from continued improvement in operating performance and greater risk-adjusted capitalization.

The ratings and outlooks may come under negative pressure if operating results materially deteriorate, resulting in a significant decline in capitalization.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.



Tennessee Reinsurers United States Financial Strength Missouri Mutual Insurers Life Insurers Press Release Insurance Issuer Credit Rating Best's Credit Rating Action


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