Best’s News & Research Service - November 11, 2015 09:07 AM (EST)
A.M. Best Upgrades Ratings of Florida Family Insurance Company and Its Subsidiary
- November 11, 2015 09:07 AM (EST)
Oldwick //BestWire// - A.M. Best has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and the issuer credit ratings to “a-” from “bbb+” for Florida Family Insurance Company (FFIC) and its subsidiary, Lakeview Insurance Company, together which make up the two reinsured pool members of Florida Family Group. The outlook for both ratings has been revised to stable from positive. Both companies are domiciled in Bonita Springs, FL.
The upgrades are a reflection of the group’s consistent trend of strong operating results, growth of policyholders’ surplus and operating returns that compare favorably with the composite average over the past ten years. In addition, the group’s level of capitalization has increased over the same period stemming from above- average net income and close management of its underwriting guidelines, rate levels, credit risk and asset risk. While losses from a weather-related catastrophe are the leading risk impacting its risk-adjusted capitalization, management has been proactive over the long term to control and mitigate this risk through various underwriting, risk transfer and claims management procedures. Catastrophe reinsurance is maintained at a level that addresses severity and frequency, which is causing the modeled after-tax probable maximum loss to be conservative relative to the level of policyholders’ surplus. Also, the single state of operation makes the mitigation of the legislative and regulatory activity challenging for management, however, it has been demonstrated that they have been effective at addressing the impact that these risks have on the enterprise.
Based on management’s current strategies and action plans, the trend of operating performance demonstrated over the past several years and level of risk-adjusted capitalization will remain at a level that supports the current credit rating.
Negative rating action may follow if there were a significant deterioration of operating performance or an unexpected and material decline in risk-adjusted capitalization.
Positive rating action may occur if strong underwriting performance over an extended period of time were to be reported resulting in a significant increase in risk-adjusted 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 visit A.M. Best’s Ratings & Criteria Center.
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