AM Best Revises Issuer Credit Rating Outlook to Positive for Daily Underwriters of America
- May 16, 2024 10:37 AM (EDT)
//BestWire// - AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Daily Underwriters of America (DUA) (Carlisle, PA). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect DUA’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The positive Long-Term ICR outlook reflects AM Best's expectation that DUA’s operating performance metrics are sustainable, which could warrant a more favorable assessment, supporting the company’s strongest balance sheet strength assessment with organic capital generation.
DUA’s underwriting results and overall operating performance metrics continue to outperform the industry and its peers by wide margins, despite the inherent challenges of operating as an insurer specializing in commercial transportation. Excellent operating performance reflects the company's adherence to stringent underwriting guidelines, driving organic surplus growth that strengthens risk-based capitalization, as measured by BCAR (Best’s Capital Adequacy Ratio). The limited business profile reflects DUA’s mono-line underwriting in commercial auto liability with a concentrated source of business from a long-standing managing general agency relationship that has provided excellent selection for DUA’s business.
Positive rating action could occur in the near term if the company’s operating results consistently compare favorably with similarly assessed peers. Negative rating action could occur if the balance sheet strength assessment is negatively impacted by significant declines in surplus or if risk-adjusted capitalization materially decreases.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.