Best’s News & Research Service - June 20, 2024 03:26 PM (EDT)
AM Best Revises Outlooks to Stable for Members of Bankers Insurance Group
- June 20, 2024 03:26 PM (EDT)
//BestWire// - AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Ratings of “bbb-” (Good) of the members of Bankers Insurance Group (Bankers). The group’s members are Bankers Insurance Company (St. Petersburg, FL) and its property/casualty subsidiaries, Bankers Specialty Insurance Company (Metairie, LA) and First Community Insurance Company (St. Petersburg, FL).
The Credit Ratings (ratings) reflect Bankers’ balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revised outlooks to stable from negative reflect significant improvement in Bankers’ balance sheet metrics and level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Beginning in 2022, the group began non-renewing specific classes of homeowner’s business with the last policy being non-renewed in 2024. The volatility within the homeowners segment from elevated weather events in more recent years, coupled with rising reinsurance and litigation costs has pressured the group’s operating performance and balance sheet metrics in more recent years. While the increasing trend in litigation cases was addressed with Assignment of Benefits reform in December 2022, the group still faced elevated reinsurance costs from the rising frequency and severity of weather-related events. With the exit from the homeowners line of business and reduction in probable maximum losses, subsequent reinsurance needs have been lowered significantly. An additional benefit also has been the improvement of the overall risk characteristics of the book of business, which now focuses on commercial multi-peril and bail/surety business where Bankers remains a top writer. It is AM Best’s expectation that these initiatives will continue to stabilize previously reported volatility in operating performance metrics while aiding organic surplus growth.
Bankers’ limited business profile reflects the limited geographic spread of risk of which the majority still remains in Florida. An appropriate ERM program is maintained through risk appetite and tolerance statements with risk management capabilities appropriately aligned with the group’s risk profile.
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.