Best’s News & Research Service - August 30, 2019 09:16 AM (EDT)
AM Best Upgrades Credit Ratings for Members of Ally Insurance Group
- August 30, 2019 09:16 AM (EDT)
Oldwick //BestWire// - AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings to “a-” from “bbb+” for the members of the Ally Insurance Group (Ally Insurance). The members include Motors Insurance Corporation and its reinsured subsidiaries, MIC Property and Casualty Insurance Corporation and CIM Insurance Corporation, as well as an affiliate, Ally International Insurance Company, Ltd. (AIICL). All companies are domiciled in Detroit, MI, except AIICL, which is domiciled in Bermuda. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Ally Insurance’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The rating upgrades reflect the favorable impact of improvement in the financial condition of the ultimate parent, Ally Financial Inc. [NYSE: ALLY], and positive trends as credit default swap spreads and financial leverage ratios continue to decline. Ally Financial Inc. is a Delaware bank holding company headquartered in Detroit, MI.
Ally Insurance has a well-established market presence as a specialized writer of vehicle service contracts, vehicle inventory insurance and guaranteed asset protection. As a result, Ally Insurance has a concentration of underwriting risk in the auto industry. Ally Insurance’s positive rating attributes are derived from management’s extensive product knowledge and established track record of solid earnings generated from its long-term business. The group has consistently generated capital through operating earnings, which is reflective of disciplined underwriting and a steady stream of investment income and realized gains. Management is committed to maintaining the strongest level of risk-adjusted capitalization, which is supportive of its ratings.
Factors that may lead to positive rating actions include improved and sustainable underwriting and operating performance that outperforms peers and the property/casualty industry throughout the underwriting cycle. Positive rating actions may occur from improvement in the financial condition of the ultimate parent, Ally Financial, Inc. Negative rating factors include significant weakening of risk-adjusted capitalization, an unfavorable operating performance trend, or deterioration in the financial condition of Ally Financial, Inc.
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 Understanding 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.
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